Problem: Calculate the average fixed cost of producing snowflakes. Hint: Case: Augusta Training Shop: Snowflakes. Note that this question is not asking you to calculate the average fixed cost for the entire non-profit operation, but rather for a specific product category. Refer to exhibit 3 for this question. Here, you will have to decide which costs are indeed fixed (i.e., they have nothing to do directly with the production of snowflakes), and justify your choices. Next, you will need to decide what fraction of total fixed costs should be allocated to the production of snowflakes. The case does not provide that information, so you need to make an informed assumption. Use the fraction of total revenues that can be attributed to snowflakes for this calculation.

Please explain your answer:

Exhibit 3: Statement of Functional Expenses, Year ended 2013 Expense 2013 Total ($) Management and supervisory salaries 106,079 Wages for hourly paid employees 49,000 Benefits paid to salaried employees 10,160 Payroll taxes (7.65% of wages) 11,798 CPA fees 7,293 Office expenses (e.g. computers, printers and paper) 6,301 Utilities (electricity, gas, etc.) 11,692 Building and grounds maintenance 5,979 Travel 2,081 Insurance 8,794 Grant program expenses 7,773 Telephone 1,678 Printing and publications 242 Depreciation on buildings and equipment 11,955 Program supplies 16,221 Other expenses 9,324 Total 266,372