• Modern Design Studio wants to estimate its annual costs associated with clients. Assume costs for design supplies and staff are variable costs.
• Data from last year (90 clients):
  • Design supplies: $18,000
  • Staff wages: $140,000
  • Manager salary: $85,000
  • Office rent: $42,000
• Required:
  • Use account analysis to estimate total fixed costs per year and the variable cost per unit. State the results in the cost equation form Y = f + vX.
  • Estimate the total costs for next year assuming 110 clients will be served.