Question Details

(Solved) (Latest ver. Aug 2020) - Managerial Accounting - Cost Accounting

Brief item decscription

Item details:


Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $800 and the variable cost per cup of coffee served is $.67.

Fill in the following table with your estimates of total costs and cost per cup of coffee at the indicated levels of activity for a coffee stand. (Round average cost per cup of coffee to 3 decimal places. Omit the "$" sign in your response.)
Cups of Coffee Served in a Week
Fixed cost$

Variable cost

Total cost$

Average cost per cup of coffee served$

Requirement 2:
Does the average cost per cup of coffee served increase, decrease, or remain the same as the number of cups of coffee served in a week increases?



Remains the same

The Alpine House, Inc., is a large retailer of winter sports equipment. An income statement for the company's Ski Department for a recent quarter is presented below:

The Alpine House, Inc.
Income Statement-Ski Department
For the Quarter Ended March 31
Sales $842,540
Cost of goods sold 302,820
Gross margin 539,720
Selling and administrative expenses:
Selling expenses$253,000
Administrative expenses154,000 407,000
Net operating income $132,720

Skis sell, on the average, for $409 per pair. Variable selling expenses are $49 per pair of skis sold. The remaining selling expenses are fixed. The administrative expenses are 20% variable and 80% fixed. The company does not manufacture its own skis; it purchases them from a supplier for $147 per pair.

Requirement 1:
Prepare a contribution format income statement for the quarter. (Input all amounts as positive values. Omit the "$" sign in your response.)

The Alpine House, Inc.
Income Statement-Ski Department
For the Quarter Ended March 31


Variable expenses:


Fixed expenses:


Requirement 2:
For every pair of skis sold during the quarter, what was the contribution toward covering fixed expenses and toward earning profits? (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)

Contribution margin per pair$

St. Mark's Hospital contains 450 beds. The average occupancy rate is 78% per month. In other words, on average, 78% of the hospital's beds are occupied by patients. At this level of occupancy, the hospital's operating costs are $21.10 per occupied bed per day, assuming a 30-day month. This $21.10 figure contains both variable and fixed cost elements.

During June, the hospital's occupancy rate was only 38%. A total of $200,583 in operating cost was incurred during the month.

Requirement 1:

(a)Estimate the variable cost per occupied bed on a daily basis using high-low method. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Variable cost per bed-day$

(b)Estimate the total fixed operating costs per month using high-low method. (Omit the "$" sign in your response.)

Fixed operating costs per month$

Requirement 2:
Assume an occupancy rate of 62% per month. What amount of total operating cost would you expect the hospital to incur? (Omit the "$" sign in your response.)

Fixed costs$

Variable costs

Total expected costs$



About this question:

This question was answered on: Sep 16, 2020

PRICE: $11.5 (18.37 KB)

Buy this answer for only: $11.5

Pay using PayPal (No PayPal account Required) or your credit card. All your purchases are securely protected by PayPal.

Need a similar solution fast, written anew from scratch? Place your own custom order

We have top-notch tutors who can help you with your essay at a reasonable cost and then you can simply use that essay as a template to build your own arguments. This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student. New solution orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

Order Now