Holly Thompson has been operating a beauty shop in a university town for the past 10 years. Recently, Holly rented space next to her shop and opened a tanning salon. She anticipated that the costs for the tanning service would primarily be fixed but found that tanning salon costs increased with the number of appointments. Costs for this service over the past eight months are as follows:

MonthTanning AppointmentsTotal Cost ($)January1,4003,516February4,0004,280March6,2005,580April5,0004,800May3,0003,600June4,6004,550July2,3004,400August6,0005,280Required:

1.Which month represents the high point? The low point?

High pointAugust

Low pointJanuary

2.Using the high-low method, compute the variable rate for tanning. Compute the fixed cost per month. Round the variable rate per tanning appointment to the nearest cent.

Variable rate for tanning$per tanning appointmentFixed cost per month$

3.Using the variable rate and fixed cost, what is the cost formula for tanning services?

4.Calculate the total predicted cost of tanning services for September for 5,000 appointments using the cost formula found in Requirement 3. Of that total cost, how much is the total predicted fixed cost for September?

How much is the total predicted variable cost for September?

In your calculations, round variable cost per unit to the nearest cent. If required, round the final answers to the nearest dollar.

Total predicted cost for September$Total fixed cost for September$Total predicted variable cost for September$