Data Table Club Membership (number of members) Total Operating Costs $ 9,000 $ 9,500 $ 10,100 $ 9,800 $ 10,540 $ 9,900 Average Operating Costs per Member $ 20.45 $ 20.21 $19.80 $ 20.42 $19.16 $ 19.80 Month December 500 Print Done As the new manager of a local fitness club, Kids Gym, you have been studying the club's financial data. You would like to determine how the club's costs behave in like to order to make accurate predictions for next year. Here is information from the last six months: (Click on the icon to view the information.) Read the requirements Requirement 1. By looking at the Total Operating Costs and the Average Operating Costs per Member, can you tell whether the club's operating costs are variable, accurate predictions for next year. Her is inforatonmfciadata fixed, or mixed? Explain your answer. By looking at "Total Operating Costs," we can see that the club's operating costs are not purely fixed; otherwise, total costs would remain constant. By looking at the "Operating Costs per Member," we can see that the operating costs are purely variable; otherwise, the "per-member" cost would remain constant. Therefore, the club's operating costs are mixed. Requirement 2. Use the high-low method to determine the club's monthly operating cost equation. First, determine the formula and calculate the variable cost per unit (the slope of the mixed cost line). (Round your answer to the nearest cent.) Change in total operating costs Change in volume Variable cost per unit = Next, let's determine the formula and calculate the fixed cost component using the highest volume of activity. (Round your answers to the nearest whole dollar.) Total operating costs Total variable costs Total fixed costs Determine the club's monthly operating cost equation. (Enter the variable cost per unit to the nearest cent and the total fixed costs to the nearest dollar.) x+$ Requirement 3. Using your answer from Requirement 2, predict total monthly operating costs if the club has 570 members Determine the formula and calculate the predicted operating costs if the club has 570 members. Total predicted operating costs ( Requirement 4. Can you predict total monthly operating costs if the club has 2,000 members? Explain your answer. 0 A. We have to exclude the fixed operating costs since we don't know what the fixed operating costs would be at that level. The total monthly operating costs O B. We have to exclude the variable operating costs since we don't know what the variable operating costs would be at that level. The total monthly operating O c. You can predict total monthly operating costs if the club has 2,000 members using the monthly operating cost equation. The total monthly operating costs O D. Our current data and cost equation are based on 440 to 550 members. If membership reaches 2,000, operating costs could behave much differently. That Choose from any list or enter any number in the input fields and then continue to the next question. would be $28,000. costs would be $2,840 would be $30,840. volume falls outside our current relevant ranae. Requirement 5. Prepare the club's traditional income statement and its contribution margin income statement for the month of July. Assume that your cost equation from Requirement 2 accurately describes the club's cost behavior. The club charges members $25 per month for unlimited access to its facilities. First, prepare the club's traditional income statement. Kids Gym Income Statement For the Month Ended July 31 Now, prepare the club's contribution margin income statement. (Round all amounts to the nearest dollar.) Kids Gym Now, prepare the ciub's contribution margin income statement. (Round all amounts to the hearest dollar.) Kids Gym Contribution Margin Income Statement For the Month Ended July 31 Less Less Requirement 6. Perform regression analysis using Microsoft Excel. What is the monthly operating cost equation? What is the R-square? Why is the cost equation different from that in Requirement 2? What is the monthly operating cost equation? (Enter the variable cost per unit to the nearest cent and the total fixed costs to the nearest dollar.) y=$ What is the R-square? (Round the R-square to 4 decimal places, X.Xxxx.) X+$ The R-square is Why is the cost equation different from that in Requirement 2? O A. The regression analysis cost equation uses all of the data points, except the data from November and July. Therefore, it better represents all of the data. O B. The regression analysis cost equation uses all of the data points, except the data from November and July. Therefore, it does not represent the data as well as in Requirement 2. The regression analysis cost equation uses all of the data points, not just the data from November and July. Therefore, it better represents all of the data. The regression analysis cost equation uses ust the data from November and July, but Excelis more accurate than the ca cu ations you performed in Requirement 2. C. 0 D hoose from any list or enter any number in the input fields and then continue to the next