Tom's Shoe Repair provides a variety of shoe repair services.Analysis of monthly costs revealed...

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Accounting

Tom's Shoe Repair provides a variety of shoe repair services.Analysis of monthly costs revealed the following cost formulas whendirect labor hours are used as the basis of cost determination:
Supplies: y=$0+$4.00X
Production supervision and direct labor: y=$500+$7.00X
Utilities: y=$350+$5.40X
Rent: y=$450+$0.00X
Advertising: y=$75+$0.00X
a. Prepare a flexible budget 250, 300, 350, and 400 direct laborhours.
b. Calculate a total cost per direct labor at each level ofactivity.
c. Tom's employees usually work 350 direct labor hours permonth. The average shoe repair requires 1.25 labor hours tocomplete. Tom wants to earn a 40 percent margin on his cost. Whatshould be the average charge per customer, rounded to the nearestdollar to achieve Tom's profit objective?
*Don not use excel or any other software to solve thisproblem

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3.9 Ratings (369 Votes)

Toms Shoe Repair Flexible Budget 250 300 350 and 400 direct labor hours Toms Shoe Repair Flexible Budget at Multiple Levels of Direct Labor Hours Direct labor hours 250 300 350 400 Variable Costs Supplies at 4 per DLH 1000 1200 1400 1600 Production See Answer

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In: AccountingTom's Shoe Repair provides a variety of shoe repair services.Analysis of monthly costs revealed the...Tom's Shoe Repair provides a variety of shoe repair services.Analysis of monthly costs revealed the following cost formulas whendirect labor hours are used as the basis of cost determination:Supplies: y=$0+$4.00XProduction supervision and direct labor: y=$500+$7.00XUtilities: y=$350+$5.40XRent: y=$450+$0.00XAdvertising: y=$75+$0.00Xa. Prepare a flexible budget 250, 300, 350, and 400 direct laborhours.b. Calculate a total cost per direct labor at each level ofactivity.c. Tom's employees usually work 350 direct labor hours permonth. The average shoe repair requires 1.25 labor hours tocomplete. Tom wants to earn a 40 percent margin on his cost. Whatshould be the average charge per customer, rounded to the nearestdollar to achieve Tom's profit objective?*Don not use excel or any other software to solve thisproblem