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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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