Question

Maria Chavez owns a catering company that serves food and beverages at parties and business functions. Chavez's business is seasonal, with a heavy schedule during the summer months and holidays and a lighter schedule at other times. One of the major events Chavez's customers request is a cocktail party. She offers a standard cocktail party and has estimated the cost per guest as follows: Food and beverages Labor (0.5 hour @ $9.20 /hr.) Overhead (0.5 hour @ $18.54/hr.) Total cost per guest $ 18.00 4.60 9.27 $31.87 The standard cocktail party lasts three hours and Chavez hires one worker for every six guests, so that works out to one- half hour of labor per guest. These workers are hired only as needed and are paid only for the hours they actually work. When bidding on cocktail parties. Chavez adds a 12% markup to yield a price of about $38 per guest. She is confident about her estimates of the costs of food and beverages and labor but is not as comfortable with the estimate of overhead cost. The $18.54 overhead cost per labor-hour was determined by dividing total overhead expenses for the last 12 months by total labor-hours for the same period. Monthly data concerning overhead costs and labor hours follow:

i been trying a lot but i dont know how to calculate

Answer 1

Solution:

X I Y I **y 3900 $59,000 $ 230,100,000 2500 $63,000 $157,500,000 2700 $64,000 $ 172,800,000 3900 $68,000 $ 265,200,000 4200 $71,000 $ 298,200,000 5200 $75,000 $ 390,000,000 6200 $78,000 $ 483,600,000 7200 $80,000 $ 576,000,000 6700 $78,000 $ 522,600,000 4200 $72,000 $ 302,400,000 3800 $68,000 $ 258,400,000 6200 $76,000 $ 471,200,000 56700 $852,000 $4,128,000,000 Square of x 15,210,000 6,250,000 7,290,000 15,210,000 17,640,000 27,040,000 38,440,000 51,840,000 44,890,000 17,640,000 14,440,000 38,440,000 294,330,000

Here ΣX = $56,700, ΣΥ = $852,000, ΣΧΥ = $4,128,000,000 and Σχ = $294,330,000

Required 2A. Variable cost per hour(b) ηΣxy - (Σx)(Σy). ηΣx? - (Σκ)? On putting values in the above formula: Variable cost per hour (b) = $3.87 Fixed cost per month formula: Σy – bΣx η On putting values in the above formula: Fixed cost per month (a) = $52,706 (rounded off) Required 2B. Equation expression: Y = $52,706 + $3.87X

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