Sarah is considering the start-up of a residential cleaning business. She can buy a used car for $8000. She has a friend who will work for her. Based on her research, Sarah believes she can charge $90 to clean an average-sized family home. Sarah expects most of her clients will be local, and estimates that the round-trip driving distance associated with each job will average 10 kilometres. She has estimated the following expenses.

What is the Variable Cost per home?

Variable Costs:

Cleaning supplies $10/home

Friends wages $30/home

Oil changes $50 every 5000 km

Fuel $75 every 500 km

Tires $500 every 100,000 km

Depreciation of vehicle $150 per 1000 km

Answer (Need work shown):

43.15/home

Answer (Needs work shown):

$224,392,000