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Brian is considering opening a Fast 'n Clean Car Service Center. He estimates that the following costs will be incurred during his first year of operations: Rent $9,200, Depreciation on equipment $7,000, Wages $17,435, Motor oil $2 per quart. He estimates that each oil change will require 5 quarts of oil. Oil filters will cost $3.00 each. He must also pay The Fast 'n Clean Corporation a franchise fee of $1.10 per oil change since he will operate the business as a franchise. In addition, utility costs are expected vary with the quantity of oil changes as follows: Quantity of Oil Changes 6,000 (a) 8,000 11,000 14,000 18,000 Brian anticipates that he can provide the oil change service with a filter at $39.77 each. Using the high-low method, determine variable costs per unit and total fixed costs. (Round variable cost to 2 decimal places, e.g. 52.75.) Variable cost Fixed cost Utility Costs $13,960 $17,300 $19,600 $22,600 $25,000 $ VA per unit

Brian is considering opening a Fast 'n Clean Car Service Center. He estimates that the following costs will be incurred during his first year of operations: Rent $9,200, Depreciation on equipment $7,000, Wages $17,435, Motor oil $2 per quart. He estimates that each oil change will require 5 quarts of oil. Oil filters will cost $3.00 each. He must also pay The Fast 'n Clean Corporation a franchise fee of $1.10 per oil change since he will operate the business as a franchise. In addition, utility costs are expected vary with the quantity of oil changes as follows: Quantity of Oil Changes 6,000 (a) 8,000 11,000 14,000 18,000 Brian anticipates that he can provide the oil change service with a filter at $39.77 each. Using the high-low method, determine variable costs per unit and total fixed costs. (Round variable cost to 2 decimal places, e.g. 52.75.) Variable cost Fixed cost Utility Costs $13,960 $17,300 $19,600 $22,600 $25,000 $ VA per unit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Brian is considering opening a Fast 'n Clean Car Service Center. He estimates that the following costs will be incurred during his first year of operations: Rent $9,200, Depreciation on equipment $7,000, Wages $17,435, Motor oil $2 per quart. He estimates that each oil change will require 5 quarts of oil. Oil filters will cost $3.00 each. He must also pay The Fast 'n Clean Corporation a franchise fee of $1.10 per oil change since he will operate the business as a franchise. In addition, utility costs are expected vary with the quantity of oil changes as follows: Quantity of Oil Changes (a) 6,000 8,000 11,000 14,000 18,000 Brian anticipates that he can provide the oil change service with a filter at $39.77 each. Fixed cost Using the high-low method, determine variable costs per unit and total fixed costs. (Round variable cost to 2 decimal places, e.g. 52.75.) Variable cost $ Utility Costs $13,960 $17,300 $19,600 $22,600 $25,000 LA $ per unit
Transcribed Image Text:Brian is considering opening a Fast 'n Clean Car Service Center. He estimates that the following costs will be incurred during his first year of operations: Rent $9,200, Depreciation on equipment $7,000, Wages $17,435, Motor oil $2 per quart. He estimates that each oil change will require 5 quarts of oil. Oil filters will cost $3.00 each. He must also pay The Fast 'n Clean Corporation a franchise fee of $1.10 per oil change since he will operate the business as a franchise. In addition, utility costs are expected vary with the quantity of oil changes as follows: Quantity of Oil Changes (a) 6,000 8,000 11,000 14,000 18,000 Brian anticipates that he can provide the oil change service with a filter at $39.77 each. Fixed cost Using the high-low method, determine variable costs per unit and total fixed costs. (Round variable cost to 2 decimal places, e.g. 52.75.) Variable cost $ Utility Costs $13,960 $17,300 $19,600 $22,600 $25,000 LA $ per unit
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