Local Bank does not know how much of its cheque-processing costs are fixed and how much are

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Local Bank does not know how much of its cheque-processing costs are fixed and how much are variable. However, total costs have been estimated at £750,000 for processing of 1,000,000 transactions and £850,000 for processing of 1,200,000 transactions.

• What are the variable costs per transaction?

• What are the fixed costs?

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