Nestor Travel Services books airline flights, cruises, and various package tours for its customers. These booking operations use the same resources, in roughly the same quantities.

REQUIRED:

Using the above data, derive the cost formula for Nestor Travel Services. Make sure you run both sets of numbers and then use the second cost formula to determine if there are any mixed costs in this problem.

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Nestor Travel Services Cost for 500 Travelers Variability, 500- Cost for 1000 Travelers 100 Passengers Fixed Portion for 500 Passengers Resources Booking agents $70,000 $70,000 Computers $2,000 $2,000 Accounting clerk $25,000 $25,000 Telephones $1,060 $2,060 Fax machines $150 $150 Telephone/fax service charge $225 $350 Desks $800 $800 Rent on building $30,000 $30,000 Tickets issued $500 $1,000 Management costs $50,000 $50,000 Totals $-