a. What is the cost of preparing one batch of 100 pieces?
b. If management projects sales of 300 pieces, what are the total batch and unit costs?
c. If management estimates sales of 250 pieces, what are the total costs?
a. The cost of preparing one batch of 100 pieces is $39.
b. For sales of 300 pieces, the total batch cost is $117 and the unit cost is $0.39 per piece.
c. For sales of 250 pieces, the total cost is $117.
Determining the Cost of One Batch
To determine the cost of preparing one batch of 100 pieces, we need to consider the cost of chicken, labor, and oil. Each batch requires 10 bags of chicken at $2 per bag, resulting in a chicken cost of $20. Labor cost is calculated by multiplying 2 hours of work by an $8 hourly wage, giving a labor cost of $16. Lastly, the cost of oil at $3 per batch must be factored in. Adding these costs together, the cost of preparing one batch is $20 + $16 + $3 = $39.
Projecting Total Batch and Unit Costs
If management projects sales of 300 pieces, the total batch cost would be $117, with a unit cost of $0.39 per piece. To arrive at this calculation, we see that three batches are needed for the 300 pieces, and the total batch cost is obtained by multiplying $39 (the cost of one batch) by 3.
Determining Total Costs for Estimated Sales
For estimated sales of 250 pieces, we need to determine how many batches are required. Since each batch contains 100 pieces, 2.5 batches are needed. However, we always round up to the nearest whole number, so 3 batches would be required. Therefore, the total cost for sales of 250 pieces would be $117.
Please note that the calculations assume all costs remain constant per batch regardless of the quantity prepared or sold.