• Blue Sky Advertising is reviewing its annual costs associated with clients. Assume costs for advertising supplies and staff are variable costs.
• Data from last year (100 clients):
  • Advertising supplies: $18,000
  • Staff wages: $140,000
  • Manager salary: $95,000
  • Building rent: $48,000
• Required:
  • Use account analysis to estimate total fixed costs per year and the variable cost per unit. State the results in the cost equation form Y = f + vX.
  • Calculate the estimated costs for next year assuming 120 clients will be served.