solution for this case study 545701

Appendix B 1 The Daily Grind accT Twelve months ago, David opened a coffee shop, The the first year of operations. Fringe benefits for David, Daily Grind, in Mercy Hospital’s former gift shop. including health insurance and payroll taxes, accounted David was confident that he had the knowledge to make for an additional $10,000 of costs for the company. a success of this new business. He produced a quality Part-time employees work an average of 24 hours product that people needed, had priced the product each week and are paid $9 per hour. Payroll taxes and to be very competitive, and had a great location in a other costs average about $1.00 per hour for part- high-traffic area of the hospital. time employees. As shown in the following table, part- time employees worked from 656 hours to 727 hours each month: Material Costs Part-time Employee Month Labor Hours he Daily Grind uses a specialty brand of Kona January 722 hours Tcoffee beans costing $8 per pound. Each pound February 656 hours of coffee beans produces 256 ounces of coffee. Coffee March 727 hours is sold in three sizes: a small cup holding 8 ounces, a April 705 hours medium cup holding 12 ounces, and a large cup hold- ing 16 ounces. May 727 hours The cups needed to serve the coffee cost $.05 for June 705 hours the small cup, $.06 for the medium cup, and $.07 July 727 hours for the large cup. Lids cost $.03 per cup and are the August 727 hours same regardless of cup size. Sleeves cost an additional September 705 hours $.04 per cup. On average, sugar and cream cost $.02 per October 727 hours cup for small cups, $.03 for medium cups, and $.04 for large cups. November 705 hours December 727 hours Labor Costs he Daily Grind is open 12 hours each day, 7 days Overhead Costs Ta week (365 days per year), and is staffed with three employees during the morning shift (7:00–11:00), uring the first year of operations, the hospital two employees from 11:00 until 3:00, and three em- Dcharged…