please find attached case study with questions. Please explain how the question was solved.

Mini Case 2 - Chapter 3 Rusty Redlow has always independently managed his personal investment portfolio. After a 25year career as a chemical engineer with a large chemical company, Rusty retired and on January 1, 2016, opened an investment advisory business incorporated as R&R Financial Planning LLC. Rusty was eager to share his knowledge and investing experience with people in similar positions to himself; that is, those who have recently retired. Also, Rusty has discovered there is an unmet need for financial-planning advice for people living in rural areas. Through his parents, Rusty has learned that there are many seniors who cannot, or prefer not to, drive to larger cities for financial-planning help. Therefore, unlike other financial-planning firms, Rusty drives to his sometimes-remote rural clients who can be many kilometres from his home. The first year of operations of Rusty's company was well liked by clients, and he quickly built his client list to 35 (which is the maximum he plans to serve). However, despite this success, his firm lost several thousand dollars last year. Prior to offering his services, Rusty had investigated client fee structures of several other firms. He discovered that some firms charge clients based on a percent of the amount of client investment dollars under management, some combine a fixed annual fee with a smaller percent of client investment amounts, and others charge an hourly fee. Rusty decided to charge clients a fixed fee for the first two years. Because of an operating loss so far in 2017, however, Rusty is looking for help to analyze his financial results and is seeking advice on how much to charge clients in 2017. In his first year of operations, he found some clients required very little time while others call frequently and demand visits and monthly hard copies of statements. (Many older clients do not have Internet or email access and prefer face-to-face meetings.) Therefore, Rusty is considering a fee structure not currently being used in the industry; specifically, he would like to charge an annual fixed fee combined with a variable portion based on time spent on each client account (information he carefully tracked during the first year). He believes this would better reflect the cost to service the various clients. Because most clients are in rural areas, on average, more than 90% of Randy's time is spent driving to and from the client. The firm employs an assistant to help with administrative responsibilities, and this person works 20 hours per week out of Rusty's home office. Rusty also contracted with another local person to help once a month with the preparation and mailing of a monthly investment news and portfolio update. The following sets out the operating results of R&R Financial Planning for the past full year of 2016. Cost categories: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Financial planner salary (Rusty Redlow) Assistant salary (extra quarter-end help) Internet subscription Bloomberg monthly data feed Depreciation (office equipment) Depreciation (car) Car - road side assist., Mtce and Gas Supplies Insurance Portfolio information and mailing Utilities $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 950 135 220 80 380 308 644 102 36 145 950 135 220 80 380 190 505 102 29 120 950 135 220 80 380 185 500 102 14 110 950 135 220 80 380 210 551 102 22 125 950 135 220 80 380 170 514 102 18 112 950 135 220 80 380 55 440 102 8 92 950 135 220 80 380 59 475 102 13 104 950 135 220 80 380 120 500 102 12 111 950 135 220 80 380 155 500 102 14 119 950 135 220 80 380 214 540 102 29 131 950 135 220 80 380 168 500 102 12 110 950 135 220 80 380 168 480 102 15 116 Total Hours with clients (includes driving time) $7,500 $7,211 $7,176 $7,275 $7,181 $6,962 $7,018 $7,110 $7,155 $7,281 $7,157 $7,146 254 148 142 149 109 19 21 55 85 151 105 110 Required: 1. Determine the independent variable and use the 2016 data above to determine which costs are variable (V), mixed (M), or fixed (F). 2. Use the high-low method to separate fixed costs per month and the variable costs. 3. Recommend a fee structure for Rusty, assuming his goal is to break even (including Rusty's annual salary). The fee should include a fixed cost per client based on the stated maximum of 35 clients and a variable portion. 4. If Rusty were to record odometer readings when visiting clients, could this data be used to improve the variable charge rate? Would this change the classification of any of the cost categories