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Daniel is considering opening a Fast ' n Clean Car Service Center. He estimates that the following costs will be incurred during his first year
Daniel is considering opening a Fast ' n Clean Car Service Center. He estimates that the following costs will be incurred during his first year of operations: Rent $9,200, Depreciation on equipment $7,000, Wages $16,204. Motor oil $2 per quart. He estimates that each oil change will require 5 quarts of oil, Oil filters will cost $3.00 each. He must also pay The Fast' C Clean Corporation a franchise fee of $1.10 per oil change since he will operate the business as a franchise. In addition, utility costs are expected vary with the quantity of oil changes as follows: Daniel anticipates that he can provide the oil change service with a filter at $29.81 each. Using the high-low method, determine variable costs per unit and total fixed costs. (Round variable cost to 2 decimal places, eg. 52.75.) Variable cost per unit Fixed cost
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