Question

Assume a local gluten-free pizzeria, on Harrison street, reported the following results for June and July

Jun Jul

Unit Sales 2,500 2,900

Cost of Food Sold 10,000 10,600

Wages and Salaries 3,700 4,000

Rent 2,000 2,000

Depreciation 500 500

Utilities 1,400 1,500

Supplies 500 580

Total 18,100 19,180

a. Identify each cost as being fixed, variable or mixed.

b. Determine the equation for total operating costs (Fixed + Unit Variable Cost * # of pizzas)

c. Predict the total operating costs for 3500 pizzas

d. Determine the average costs for 3500 pizzas

Answer 1