The previous manager of

Fitness minus for minus AllFitnessforAll

started the following schedule, but left before completing it. The manager wasn't sure but thought the club's fixed operating costs were

$ 30 comma 000$30,000

per month and the variable operating costs were

$ 4$4

per member. The club's existing facilities could serve up to

1 comma 0001,000

members per month.

Requirements

1.

Complete the schedule shown below for different levels of monthly membership assuming the previous manager's cost behavior es

Requirement 1. Complete the following schedule for different levels of monthly membership assuming the previous manager's cost behavior estimates are accurate. (Round all unit costs to the nearest cent.)

Monthly Operating Costs	200 members	600 members	1,000 members
Total variable costs
Plus: Total fixed costs
Total operating costs
Variable cost per member
Plus: Fixed cost per member
Average cost per member

Requirement 2. As the manager of the fitness club, why shouldn't you use the average cost per member to predict total costs at different levels of membership?

The average cost per member should not be used to predict total costs at different volumes of membership because

the average cost per member changes as volume changes.

only the fixed cost per member should be used to predict total costs.

the data is not reliable.

The average cost per member

decreases as volume increases

increases as volume increases

due to the

fixed

variable

component of the club's operating costs. Managers should base cost predictions on

cost behavior patterns

fixed costs only

variables costs only

,

not on the average cost per member.

Enter any number in the edit fields and then continue to the next question timates are accurate.

2.

As the manager of the fitness club, why shouldn't you use the average cost per member to predict total costs at different levels of membership?