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Cost Behavior Analysis in a Restaurant: High-Low Cost Estimation Assume a Papa Johns restaurant has the following informatio
Fees paid delivery help Fixed Rent on building Fixed Depreciation on equipment Fixed Utilities Mixed Supplies (soap, floor wa
2 My Subscriptions Maggle Run Administrative costs Roxed (5) Use the high low method to develop a schedule identifying the am
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Answer #1

a)The identification of variable, fixed or mixed cost is as follows:

Variable, fixed or mixed cost
Cost of goods sold    Variable
Wages and fringe benefits    Mixed
Fees paid delivery    Variable
Rent on building     Fixed
Depreciation     Fixed
Utilities Mixed
Administrative costs Fixed

b) The total cost for a monthly sale volume of 9,800 units are as follows:

Fixed Variable Total
Monthly sales volume    9,800 units
Cost of goods sold         -    19,600       $19,600
   (9,800 * $2)
Wages and fringe benefits        5,000      294       $5,294
(9,800 units * 0.03)
Fees paid delivery       -         2,254         $2,254
(9,800 units * 0.23)
Rent on building     1,400             -     $1,400
Depreciation on Equipment          800             -           $800
Utilities          600          196         $796
(9,800 units * 0.02)
Supplies         100       294           $394
(9,800 units * 0.03)
   Administrative costs         1,200          $1,200
Total cost for 9,800 units         $31,738
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