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Creative Marketing Agency wants to estimate its annual costs associated with clients. Assume costs for marketing materials and staff are variable costs. Data from last

  • Creative Marketing Agency wants to estimate its annual costs associated with clients. Assume costs for marketing materials and staff are variable costs.
  • Data from last year (90 clients):
    • Marketing materials: $18,000
    • Staff wages: $140,000
    • Manager salary: $85,000
    • Office rent: $42,000
  • 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.
    • Estimate the total costs for next year assuming 110 clients will be served.

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