1. Account Analysis.Consulting Services, Inc., would like to estimate costs associated with its clients on an annual basis. Assume costs for supplies and advertising staff are variable costs. The accounting records indicate the following costs were incurred last year for 100 clients:

Supplies$20,000Advertising staff (hourly employees)$170,000Manager salary$90,000Building Rental$56,000

Required:

Use account analysis to estimate the total fixed cost per year and the variable cost per client. State your results in the cost equation form Y =f+vX by filling in the dollar amounts forfandv.

Estimate the total costs for this coming year assuming 120 clients will be served.

Account Analysis a. Total fixed costs () are calculated as follows: Manager salary 590.000 Correct Building rent 56.000 Correct Total fixed costs $146.000 Correct To calculate variable cost per client (v), start with total variable costs: Supplies $20.000 Correct Advertising staff wages 170,000 Correct Total variable costs $190,000 Correct Then calculate the variable cost per client (v ): $190.000 ( from above) Correct clients Incorrect Variable cost per client $1.900 per client Correct The cost equation is: Y = f+ vX b. Using the equation from above, input number of clients for X and solve for Y: Y $374.000 Correct