Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Mixed costs and Cost Formula Callie's Gym is a complete fitness center. Owner Callie Ducain employs various fitness trainers who are expected to staff the

image text in transcribed

Mixed costs and Cost Formula Callie's Gym is a complete fitness center. Owner Callie Ducain employs various fitness trainers who are expected to staff the front desk and to teach fitness classes. While on the front desk, trainers answer the phone, handle walk-ins and show them around the gym, answer member questions about the weight machines, and do light cleaning (wiping down the equipment, vacuuming the floor). The trainers also teach fitness classes (e.g., pilates, spinning, body pump) according to their own interest and training level. The cost of the fitness trainers is $1,200 per month and $40 per class taught. Last month, 100 classes were taught. Required: 1. Develop a cost equation for total cost of labor. Total labor cost 800 x 10 x per class taught 2. What was total variable labor cost last month? 1,000 x 3. What was total labor cost last month? 1,800 x 4. What was the unit cost of labor (per class) for last month? 18 x per class 5. What if Callie increased the number of classes offered by 50 percent? a. What would be the total labor cost? 2,300 X b. The unit labor cost? If required, round your answer to the nearest cent. 15.33 X per class c. Why did the unit labor cost decrease? Because the variable cost per class decreases. Because the fixed cost per unit goes down. Because the total fixed costs have changed. Because the variable cost per dass decreases. Because the variable cost per class remains unchanged

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Accounting

Authors: Radebaugh

4th Edition

0471136646, 9780471136644

More Books

Students also viewed these Accounting questions

Question

We will be opening our new facility sometime this spring.

Answered: 1 week ago