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Item Cost ($) Media supplies 22,000 Media staff wages 155,000 Manager salary 95,000 Building rent 50,000 Context: Modern Media Solutions needs to estimate annual costs

Item

Cost ($)

Media supplies

22,000

Media staff wages

155,000

Manager salary

95,000

Building rent

50,000

  • Context: Modern Media Solutions needs to estimate annual costs associated with its clients. Assume costs for media supplies and staff are variable costs.
  • Data from last year (110 clients): See table above.
  • 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 130 clients will be served.

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