Rita Jekyll operates a sales booth in computer software trade shows, selling an de the package from a software company for $175 each. Booth space at the convention hall costs $13,000 per show. Required a. Sales at past trade shows have ranged between 300 and 500 software packages per show. Determine the average cost of sales per unit if Ms. Jekyll sells 300, 350, 400, 450, or 500 units of Abacus at a trade show. Use the following chart to organize your answer. Is the cost of booth space fixed or variable? b. If Ms. Jekyll wants to earn a $56 profit on each package of software she sells at a trade show, what price must she charge at sales volumes of 300, 350, 400, 450, or 500 units? c. Record the total cost of booth space if Ms. Jekyll attends four, five, six, seven, or eight trade shows. Is the cost of booth space fixed or variable relative to the number of shows attended? d. Ms. Jekyll provides decorative shopping bags to customers who purchase software packages. Some customers take the bags; others do not. Some customers stuff more than one software package into a single bag. The number of bags varies in relation to the number of units sold, but the relationship is not proportional. Assume that Ms. Jekyll uses $38 of bags for every 60 software packages sold. What is the additional cost per unit sold? Is the cost fixed or variable?
Rita Jekyll operates a sales booth in computer software trade shows, selling an de the package from a software company for $175 each. Booth space at the convention hall costs $13,000 per show. Required a. Sales at past trade shows have ranged between 300 and 500 software packages per show. Determine the average cost of sales per unit if Ms. Jekyll sells 300, 350, 400, 450, or 500 units of Abacus at a trade show. Use the following chart to organize your answer. Is the cost of booth space fixed or variable? b. If Ms. Jekyll wants to earn a $56 profit on each package of software she sells at a trade show, what price must she charge at sales volumes of 300, 350, 400, 450, or 500 units? c. Record the total cost of booth space if Ms. Jekyll attends four, five, six, seven, or eight trade shows. Is the cost of booth space fixed or variable relative to the number of shows attended? d. Ms. Jekyll provides decorative shopping bags to customers who purchase software packages. Some customers take the bags; others do not. Some customers stuff more than one software package into a single bag. The number of bags varies in relation to the number of units sold, but the relationship is not proportional. Assume that Ms. Jekyll uses $38 of bags for every 60 software packages sold. What is the additional cost per unit sold? Is the cost fixed or variable?
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
Section: Chapter Questions
Problem 18E
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Question
Transcribed Image Text:Rita Jekyll operates a sales booth in computer software trade shows, selling an accounting software package, Abacus. She purchases
the package from a software company for $175 each. Booth space at the convention hall costs $13,000 per show.
Required
a. Sales at past trade shows have ranged between 300 and 500 software packages per show. Determine the average cost of sales
per unit if Ms. Jekyll sells 300, 350, 400, 450, or 500 units of Abacus at a trade show. Use the following chart to organize your
answer. Is the cost of booth space fixed or variable?
b. If Ms. Jekyll wants to earn a $56 profit on each package of software she sells at a trade show, what price must she charge at sales
volumes of 300, 350, 400, 450, or 500 units?
c. Record the total cost of booth space if Ms. Jekyll attends four, five, six, seven, or eight trade shows. Is the cost of booth space fixed
or variable relative to the number of shows attended?
d. Ms. Jekyll provides decorative shopping bags to customers who purchase software packages. Some customers take the bags;
others do not. Some customers stuff more than one software package into a single bag. The number of bags varies in relation to the
number of units sold, but the relationship is not proportional. Assume that Ms. Jekyll uses $38 of bags for every 60 software
packages sold. What is the additional cost per unit sold? Is the cost fixed or variable?
Complete this question by entering your answers in the tabs below.
Required A
Required B
Sales at past trade shows have ranged between 300 and 500 software packages per show. Determine the average cost of sales
per unit if Ms. Jekyll sells 300, 350, 400, 450, or 500 units of Abacus at a trade show. Use the following chart to organize your
answer. Is the cost of booth space fixed or variable?
Note: Round "Average cost per unit" answers to 2 decimal places.
Sales Volume in Units
Total cost of software
Total cost of booth rental
Total cost of sales
Required C Required D
Average cost per unit
The cost of booth space is a
$
$
$
300
52,500
13,000
65,500
218 33
350
< Required A
400
450
Required B >
500
Show less A
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