Premium Essay

Hsm/260 Week 4 Fixed Cost, Variable, Costs, Feb

In: Business and Management

Submitted By charley2001
Words 541
Pages 3
Exercise 10.1
During the sixth month of the fiscal year, the program director of the Westchester
Home-Delivered Meals (WHDM) program decides to again recompute fixed costs, variable costs, and the BEP using the high–low method. Here are the number of meals served and the total costs of the program for each of the first six months:
Month Meals Served Total Costs
July 3,500 $20,500
August 4,000 22,600
September 4,200 23,350
October 4,600 24,500
November 4,700 25,000
December 4,900 26,000

Recompute fixed costs, variable costs, and the BEP. What are the variable costs? What are the fixed costs? How many meals will the WHDM program need to provide during the fiscal year to reach the BEP? How much profit will the program earn if it completes its 45,000-meal contract with the City of Westchester?
Costs high-low $26,000- $20,500 = $5,500
Meals high-low 4,900- 3,500 = 1,400
Variable cost per meal $5,500 ÷ 1,400 = $3.93
Variable cost for the low month $13,755 ( 3,500x $3.93)
Fixed costs $6,745 ($20,500-$13,755)
3,665.76 meals per month × 12 months = 43,989.12 meals

PX = A + BX

5.77X = 6,745 + 3.93X
(Subtract 3.93X from each side.)
1.84X = 6,745
(Divide each side by 1.84)
X = 3,666 (monthly BEP)
3,666 × 12 = 43,992 (fiscal-year BEP)
45,000 meals – 43,992 meals = 1008 meals x $1.84 revenue per meal = $1,854.72 profit

Exercise 10.2
It has been two years

Similar Documents

Premium Essay

Jindal Steel - Report

...sustained growth through foresight ANNUAL REPORT 2009-2010 Vision Global recognition for size, culture and quality, while nurturing nature and society. Mission Supporting the nation’s growth in power and steel with speed and innovation. Core Values l Crystal clear l Passion for excellence l Drive with leadership l Young thinking l Challenging status quo Contents Vice Chairman’s Statement.....................................02 Highlights 2009-10.....................................................04 Board of Directors........................................................05 Notice...............................................................................06 Directors’ Report..........................................................11 Management Discussion and Analysis......................22 Report on Corporate Governance...............................38 Auditors’ Report.................................................................48 Standalone Accounts.......................................................50 Consolidated Accounts...................................................79 Shri O. P. Jindal August 7, 1930 – March 31, 2005 O. P. Jindal Group – Founder and Visionary Only a life lived for others is a life lived worth while An industrialist par excellence under whose aegis the O P Jindal Group grew from strength to strength. But for the world at large Late Shri O P Jindal was much more than that. He was also a leader of masses, some one who...

Words: 76501 - Pages: 307

Free Essay

The Case of the Unidentified Company

...Invest. Innovate. Inspire. For a new India. ANNUAL REPORT 2014-15 India is at the threshold of a new era of growth and opportunity. This is driven by increasing economic activity, ongoing ‘Make in India’ initiatives and a demographically well-placed, aspirational society. Reliance Industries Limited (RIL) continues to be a partner in India’s ongoing journey towards economic and social well-being, and remains committed to investing in and innovating for India. RIL is striving to meet and exceed global benchmarks in product quality and customer service with inspiring ideas and strategic investments. From the manufacturing landscape to high-growth consumer service sectors, RIL is achieving superior outcomes that facilitate India’s drive for global leadership. RIL is delivering industry-leading performance through consistent efficiency in operations and prudent configuration of assets. RIL is making sizable capital investments, focusing on technology and expanding its level of services from the hydrocarbons sector to consumer businesses. RIL innovates for existing businesses and also focuses on developing new business models to deliver g g g y significant value for its growing stakeholder fraternity. In this effort, it collaborates with o s with leading global institutions to help usher in a n era of possibilities. global new is growing o RIL’s focus is to continue growing as a respons responsible organisation, thereby e inspiring progress in...

Words: 182744 - Pages: 731