Purchase Solution

Two Problems Dealing with Cost Behavior

Not what you're looking for?

Ask Custom Question

Answer both of the following questions. Explain your answer briefly and clearly, showing any necessary calculations.

1. The County Historical Society and Museum is considering holding a picnic as a fundraiser. They plan to charge $15 per ticket. They can rent a facility at a state park for $300. The food would be catered by a local caterer at a cost of $4 per meal, plus $100 for setting up their equipment. A band would be hired to play for $200 plus 5% of the "gate" (gross ticket sales). The Society would like to net at least $3,000 from the event. How many tickets must be sold for them to achieve their goal?

2. Local Manufacturing Co. classifies manufacturing overhead costs into three categories. The amount of these costs for two recent months are given below...
a. Classify the behavior of each cost as fixed, variable, or mixed (assume no step functions), and express each in an equation of the form Y = a + bX, where Y is cost and X is activity in number of units.
b. Use your answer to (a) above to forecast the amount of overhead cost for September, when production is expected to total 6,200 units.

Purchase this Solution

Solution Preview

#1 County Historical Society and Museum
$15 per ticket, however 5% of the gross sales are to be given to the band which gives it an effective net of $14.25. From this is to be deducted the cost of food per person @$4. Which gives us $10.25.

Fixed Costs include
Rent of the state park $300
Setting up ...

Purchase this Solution

Free BrainMass Quizzes
Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce