Professional Documents
Culture Documents
Assignment AE 27
Assignment AE 27
Assignment AE 27
BSMA-3B
EXERCISE 1
Problem 1:
Cups of Coffee Served in a Week
1,800 1,900 2,000
Fixed cost 11,000 11,000 11,000
Variable cost 4,680 4,940 5,200
Total cost 15,680 15,940 16,200
Average cost per cup of coffee served 8.71 8.39 8.1
At 1,800 units
Variable cost ( 1,800 x ₱2.60 ) 4,680
Fixed cost 11,000
Total 15,680
Units 1,800
Average cost per cup of coffee served 8.71
At 1,900 units
Variable cost ( 1,900 x ₱2.60 ) 4,940
Fixed cost 11,000
Total 15,940
Units 1,900
Average cost per cup of coffee served 8.39
At 2,000 units
Variable cost ( 2,000 x ₱2.60 ) 5,200
Fixed cost 11,000
Total 16,200
Units 2,000
Average cost per cup of coffee served 8.1
Problem 2:
The average cost per unit decreases as the number of cups of coffee served
increases. It is because of the existence and behavior of the fixed cost.
EXERCISE 2
Problem 1
Occupancy-days Electrical costs
High Activity Level ( August ) 3,608 8,111
Low Activity Level ( October ) 186 1,712
Change 3,422 6,399
Variable cost = change in cost / change in activity Total cost (August ) 8,111
6,399 / 3,422 occupancy days Variable Cost Element 6,746.96
1.87 per occupancy days 1,364. 04 or 1,364
Problem 2
The other factors than occapany day are likely to affect the variationin electrical cost from month to month are the following:
• Electrical may reflect seasonal factors than just variation in occupancy days.
• Number of day in a month
•Frugality of individual guest/usage