The previous manager of Fitness-for-Life started the following schedule but left before completing it. The manager wasn’t sure but thought the club’s fixed operating costs were \($10,000\) per month and the variable operating costs were \($1\) per member. The club’s existing facilities could serve up to 750 members per month.

Requirements:

1. Complete the following schedule for different levels of monthly membership, assuming the previous manager’s cost behavior estimates are accurate:

2. As the manager of the fitness club, why shouldn’t you use the average cost per member to predict total costs at different levels of membership?

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1 Monthly Operating Costs 100 Members 2 Total variable costs 3 Plus: Total fixed costs 4 Total operating costs 5 6 Variable cost per member 7 Plus: Fixed cost per member 8 Average cost per member 9 C 500 Members 750 Members