# Annual cost of supplies from above or 91 total costs

• 10
• 86% (7) 6 out of 7 people found this document helpful

This preview shows page 9 - 10 out of 10 pages.

##### We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
The document you are viewing contains questions related to this textbook.
Chapter 18 / Exercise 1
Exploring Economics
Sexton
Expert Verified
Annual cost of supplies (from above or \$300,560 52%) 156,291 Total costs 325,791 Annual revenue 300,560 Mayfair downsizing plan subsidy \$ 25,231 Under current cafeteria plan Annual revenues: (\$720 + \$405 + \$300)*260 [(100 entrees \$7.20) + (90 salads/sandwiches \$4.50) + \$300 beverages/dessert] 260 days \$370,500 Cost of supplies (62% \$370,500) \$229,710 Computation of subsidy limitation Current operation: Wages and fringe benefits [\$155,000 + (25% \$155,000)] \$193,750 Utilities and equipment maintenance 52,000 Cost of supplies (from above or \$370,500 62%) 229,710 Total costs 475,460 Annual revenue 370,500 Mayfair current operations subsidy \$104,960 Mayfair Corporation’s subsidy limitation 20% of current subsidy (20% \$104,960) \$ 20,992
(b) 2. The Wilco Foods proposal is more advantageous to Mayfair Corporation than the downsizing plan and the current operations. The subsidy at the projected volume is \$11,128. The calculations follow (see next page):
##### We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
The document you are viewing contains questions related to this textbook.
Chapter 18 / Exercise 1
Exploring Economics
Sexton
Expert Verified
MGT 3131 MCS / Fall 2015 / Case Assignment #5 / 10 November 2015 Number: ____
Page 10 of 10