Question
As the new manager of a local fitness club, Gifted & Lifted, you have been studying the clubs financial data. You would like to determine
As the new manager of a local fitness club, Gifted & Lifted, you have been studying
the clubs financial data. You would like to determine how the clubs costs behave in
order to make accurate predictions for next year. Here is the information from the
last six months:
Month | Club enrollment (# of members) | Total operating costs | Operating Costs per member |
July | 450 | $8,900 | $19.78 |
August | 480 | $9,800 | $20.42 |
September | 500 | $10,100 | $20.20 |
October | 550 | $10,150 | $18.45 |
November | 560 | $10,500 | $18.75 |
December | 525 | $10,200 | $19.43 |
1-By looking at the Total Operating Costs and the Operating Costs per Member, can you tell whether the clubs operating costs are variable, fixed, or mixed? Explain your answer
2- List 10 costs the club might have and be sure to label them fixed or variable
3-Use high-low method to determine the clubs monthly operating cost equation.
4-Using the answer from number 3, predict the total monthly operating costs if the club has 800 members. What if instead you have 390 members? 1,000 members?
5-Can you predict total monthly operating costs if the club has 3,000 members? Explain your answer
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