Solution-Determine variable costs per unit and total fixed

Determine variable costs per unit and total fixed costs

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Reference no: EM131795251

Bill Braddock is considering opening a Fast ‘n Clean Car Service Center. He estimates that the following costs will be incurred during his first year of operations: Rent $9,200, Depreciation on equipment $7,000, Wages $16,400, Motor oil $2.00 per quart. He estimates that each oil change will require 5 quarts of oil. Oil filters will cost $3.00 each. He must also pay The Fast ‘n Clean Corporation a franchise fee of $1.10 per oil change, since he will operate the business as a franchise. In addition, utility costs are expected to behave in relation to the number of oil changes as follows:

Number of Oil Changes	Utility Costs
4000	6000
6000	7300
9000	9600
12000	12600
14000	15000

Bill Braddock anticipates that he can provide the oil change service with a filter at $25 each.

(a)Using the high-low method, determine variable costs per unit and total fixed costs.

Reference no: EM131795251

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Determine variable costs per unit and total fixed costs

Reference no: EM131795251

Reference no: EM131795251

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