2. Using the high-low method, compute the variable rate for tanning. Compute the fixed cost per month. Round the variable rate per tann cent and use it in your further calculations. Round the fixed cost per month to the nearest dollar and use it in your further calculations. Variable rate for tanning per tanning appointment Fixed cost per month 3. Using the variable rate and fixed cost, what is the cost formula for tanning services? 4. Calculate the total predicted cost of tanning services for September for 2,500 appointments using the formula found in Requirement 3 the total fixed cost for September? How much is the total predicted variable cost for September? If required, round the final answers to t Total predicted cost for September Total fixed cost for September
2. Using the high-low method, compute the variable rate for tanning. Compute the fixed cost per month. Round the variable rate per tann cent and use it in your further calculations. Round the fixed cost per month to the nearest dollar and use it in your further calculations. Variable rate for tanning per tanning appointment Fixed cost per month 3. Using the variable rate and fixed cost, what is the cost formula for tanning services? 4. Calculate the total predicted cost of tanning services for September for 2,500 appointments using the formula found in Requirement 3 the total fixed cost for September? How much is the total predicted variable cost for September? If required, round the final answers to t Total predicted cost for September Total fixed cost for September
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Transcribed Image Text:In your calculations, round per unit costs to the nearest cent.
2. Using the high-low method, compute the variable rate for tanning, Compute the fixed cost per month. Round the variable rate per tanning appointment to the nearest
cent and use it in your further calculations. Round the fixed cost per month to the nearest dollar and use it in your further calculations.
Variable rate for tanning
per tanning appointment
Fixed cost per month
3. Using the variable rate and fixed cost, what is the cost formula for tanning services?
4. Calculate the total predicted cost of tanning services for September for 2,500 appointments using the formula found in Requirement 3. Of that total cost, how much is
the total fixed cost for September? How much is the total predicted variable cost for September? If required, round the final answers to the nearest dollar.
Total predicted cost for September
Total fixed cost for September
Total predicted variable cost for September
5. Which of the following statements is correct when luisa uses the high-low method to estimate the costs?

Transcribed Image Text:High-Low Method
Luisa Crimini has been operating a beauty shop in a college town for the past 10 years. Recently, Luisa rented space next to her shop and opened a tanning salon. She
anticipated that the costs for the tanning service would primarily be fixed, but found that tanning salon costs increased with the number of appointments. Costs for this
service over the past 8 months are as follows:
Month
January
February
March
Tanning
Appointments
700
2,100
3,500
2,400
1,600
2,200
2,160
3,100
Total Cost
$1,746
$2,180
$2,810
$2,500
$1,800
$2,275
$2,200
$2,660
April
May
June
July
August
Required:
1. Which month represents the high point? The low point?
High point
Low point
In your calculations, round per unit costs to the nearest cent
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