Part I To recap, W.T.'s planning on the following: Newspaper ad Social media manager Payment collection Gas $120 per month $100 per month; $1 per job scheduled $0.75 per job $4.00 per job Considering his analysis of similar services and to keep things simple, W.T. plans to price all jobs the same and charge $15 per job. Because of this flat rate, he anticipates he'll likely need to create different types of "jobs". For example, purchasirg a list of items at the grocery store would be one job, while a bundle of 2-3 small errands such as picking up dry cleaning and prescriptions, might be considered one job. We'll deal with those details later. For now, assume that all jobs are priced at $15 each and all have the associated variable expenses listed above. Because this will be a new business, W.T. knows business will likely be slow at the beginning. Complete the following table assSuming W.T. completes 10 jobs in a single month. Item Per Job Total Computations (10 jobs) Sales Less: Variable Cost Contribution Margin Less: Fixed Cost $4 Gross Margin $4 %24 %24 %24 %24 %24 %24

Part I To recap, W.T.'s planning on the following: Newspaper ad Social media manager Payment collection Gas $120 per month $100 per month; $1 per job scheduled $0.75 per job $4.00 per job Considering his analysis of similar services and to keep things simple, W.T. plans to price all jobs the same and charge $15 per job. Because of this flat rate, he anticipates he'll likely need to create different types of "jobs". For example, purchasirg a list of items at the grocery store would be one job, while a bundle of 2-3 small errands such as picking up dry cleaning and prescriptions, might be considered one job. We'll deal with those details later. For now, assume that all jobs are priced at $15 each and all have the associated variable expenses listed above. Because this will be a new business, W.T. knows business will likely be slow at the beginning. Complete the following table assSuming W.T. completes 10 jobs in a single month. Item Per Job Total Computations (10 jobs) Sales Less: Variable Cost Contribution Margin Less: Fixed Cost $4 Gross Margin $4 %24 %24 %24 %24 %24 %24

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 57P: Identifying Fixed, Variable, Mixed, and Step Costs Consider each of the following independent...

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