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Sophia's Restaurant served 5,000 meals last quarter. Sophia recorded the following costs with those meals. Variable costs: Ingredients used $ 14,000 Direct labor 10,500 Indirect materials and supplies 5,300 Utilities 1,700 Fixed costs: Managers' salaries 22,000 Rent 18,000 Depreciation on equipment (straight-line, time basis) 2,000 Other fixed costs 3,000 Required: Unit variable costs and total fixed costs are expected to remain unchanged next quarter. Calculate the unit cost and the total cost if 4,500 meals are

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Answer:

The answer is below

Explanation:

Total Variable cost = Ingredients used + Direct labor + Indirect materials and supplies + Utilities = $14,000  +$10,500  + $5,300  + $1,700  = $31,500

Total Fixed cost =  Managers' salaries + Rent + Depreciation on equipment (straight-line, time basis) + Other fixed costs =  $22,000  + $18,000  + $2,000  + $3,000 =  $45,000

Total cost = Total Variable cost + Total fixed cost + $31500 + $45000 = $76500

Unit costs = Total cost / Number of meals = $76500 / 4500 meals = $15.30 per meal

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