Question 1: Bubba\'s steakhouse has budgeted the following costs for a month in

Question

Question 1:

Bubba's steakhouse has budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: Materials, $4,080; hourly labor (variable), $5,200; rent (fixed), $1,790; depreciation, $800; and other fixed costs. $510. Each steak dinner sells for $13.20 each. How much would Shula's profit increase if 10 more dinners were sold?

Question 2:

Bellfont Company produces door stoppers. August production costs are below:

Door Stoppers produced                    72,000

Direct material (variable)                                            $20,000

Direct labor (variable)                                              40,000

Supplies (variable)                                                      20,000

Supervision (fixed)                                                      28,400

Depreciation (fixed)                                                    22,500

Other (fixed)                                                                3,200

In September, Bellfont expects to produce 100,000 door stoppers. Assuming no structural changes, what is Bellfont

Explanation / Answer

Answer 1

Answer 2

Answer 3

Since the production foreccast remain same as 120 chairs there will be no change in cost. Howver assuming the same to increase to 150 solution is

Answer 4

Increamental revenue would be

$20,700 - (630*20)

$20,700 - 12,600

=8,100

Answer 5

Contribution Margin = (50,000-8,100)/50,000 = 83.80%

Increase in Profit by $10000 increase in Sales = 10,000 x 83.80% = $8,380.

Answer 6

Profit for Option 3 = $4,800

Profit for Option 2 = $1,700 - $600 = $1,100

Incremental profit = 4,800 - 1,100 = $3,700

Answer: $3,700

Particulars 1,600 Steak 1,610 Steak Selling price 13.2 13.2 Material 2.55 2.55 Labour 3.25 3.25 Total per Unit Cost 5.8 5.8 Total variable Cost 9280 9280 Rent (Fixed) 1790 1790 Depreciation ( Fixed) 800 800 Other Fixed Cost 510 510 Total Fixed cost 3100 3100 Total Per Unit Fixed cost 1.9375 1.92546584 Total per Unit cost 7.7375 7.72546584 Per Unit profit 5.4625 5.47453416 Total profit 8740 8814 Increase in Profit 74

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