Question 7 Not yet answered Marked out of 0.00 Flag question Khaled Zaki is running a Fast Oil Change Center. He estimates that the following costs will be incurred during the current year of operations: Rent $18,000, Depreciation on equipment $21,000, Wages $44,400. He estimates that each oil change will require Motor oil $21 per change. Oil filters will cost $9.00 each. He must also pay The Fast Corporation a franchise fee of $3.60 per oil change, since he will operate the business as a franchise. In addition, utility costs are expected to behave in relation to the number of oil changes as follows: Number of Oil Changes Utility Costs 12,000 $ 16,200 18,000 $ 21,900 27,000 $ 28,800 36,000 48,000 $37,800 $45,000 Mr. Zaki anticipates that he can provide the oil change service with a filter at $60.00 each and sells 5500 oil change. Required: LO# 3 EXCEL (a) (b) (c) Using the high-low method, determine variable costs per unit and total fixed costs. Determine the break-even point in number of oil changes and sales dollars. Determine the oil changes required to earn net income of $20,000. (d) Margin of safety in Dollar & Ratio (assuming the company's actual sales are 5500 oil change) (c) What is the degree of operating leverage, if sales change by 10% what is the expected change on operating income.