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Costs for Last Year (120 clients) Amount ($) Digital materials 21,000 Digital staff wages 160,000 Manager salary 88,000 Building rent 52,000 Context: Digital Media Corp

Costs for Last Year (120 clients)

Amount ($)

Digital materials

21,000

Digital staff wages

160,000

Manager salary

88,000

Building rent

52,000

  • Context: Digital Media Corp wants to estimate annual costs associated with its clients. Assume costs for digital materials and staff are variable costs.
  • Required:
    • a. Use account analysis to estimate total fixed costs per year and the variable cost per unit. Provide the cost equation in the form Y = f + vX.
    • b. Estimate the total costs for next year assuming 140 clients will be served.

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