Reference no: EM131703560
Question 1 - Jim Jones, the owner of Jim's Place, wants to analyze labor costs in his restaurant operations and has asked you for assistance. The operating statistics for the previous year are as follows:
|
Month
|
# of Customers
|
Labor Costs
|
|
Jan
|
4,000
|
$15,500
|
|
Feb
|
2,400
|
10,450
|
|
Mar
|
3,700
|
18,500
|
|
Apr
|
4,450
|
19,000
|
|
May
|
4,400
|
19,000
|
|
Jun
|
4,800
|
20,250
|
|
Jul
|
5,000
|
20,500
|
|
Aug
|
3,900
|
18,500
|
|
Sep
|
3,800
|
18,000
|
|
Oct
|
3,100
|
15,500
|
|
Nov
|
2,900
|
15,250
|
|
Dec
|
3,000
|
16,650
|
Using the high/low two-point method,
1. Determine the variable labor cost per customer.
2. What is the monthly fixed labor cost at Jim's Place?
3. What is your estimate of total labor costs if 3,900 customers are served during the month?
Question 2 - High guests were 18,000 and the low guests were 12,000 and the high and low labor costs were $25,500 and $18,000, respectively. Given this information, determine variable cost per guest and the total fixed costs, using both the high and low data to confirm your calculations
Variable cost per guest
Monthly fixed costs
Question 3 - A hotel wishes to analyze its electricity cost in its rooms department in terms of fixed and variable elements. Monthly income statements show that during its busiest and slowest months, cost and rooms occupied information is as follows:
|
|
Rooms Cost
|
Rooms Sold
|
|
Busiest
|
$4,080
|
2,800
|
|
Slowest
|
$3,100
|
1,400
|
Use the high-low method to calculate the following:
1. Variable cost per room occupied
2. Total variable cost for the busiest month
3. Total variable cost for the slowest month
4. Total fixed cost per month