question archive A restaurant has the following quarterly record of revenue and employee wage costs
A restaurant has the following quarterly record of revenue and employee wage costs
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A restaurant has the following quarterly record of revenue and employee wage costs. Using the maximum/minimum (high-low) method, determine
1) variable cost per unit (VCu) (3 points)
2) explain what your VCu value means (1 point)
3) quarterly fixed cost using either the low point (2 points)
4) total fixed wage cost for a year (Hint: this is quarterly data) (2 points)
5) total variable wage cost for a year (2 points)
Revenue Wage costs
1st Q 36,000 14,500
2nd Q 50,500 20,300
3rd Q 45,500 18,200
4th Q 58,500 22,800
Sum 190,500 75,800
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1) Variable cost per unit = $ 0.36889
2) Vcu of $0.36889 means that for every $1 increase in revenue, variable cost is $0.36889.
3) Fixed Cost $ 1,220
4) Total fixed cost for year= $ 4,880
5) Total variable cost = $ 70,920
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