Answered: Total labor cost = $fill in the blank…

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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Question

Callie's Gym is a complete fitness center. Owner Callie Ducain employs various fitness trainers who are expected to staff the front desk and to teach fitness classes. While on the front desk, trainers answer the phone, handle walk-ins and show them around the gym, answer member questions about the weight machines, and do light cleaning (wiping down the equipment, vacuuming the floor). The trainers also teach fitness classes (e.g., pilates, spinning, body pump) according to their own interest and training level. The cost of the fitness trainers is $600 per month and $20 per class taught. Last month, 100 classes were taught.

Required:

1. Develop a cost equation for total cost of labor.

Total labor cost

$fill in the blank 1

$fill in the blank 2 per class taught

2.	What was total variable labor cost last month?
	$fill in the blank 3

3.	What was total labor cost last month?
	$fill in the blank 4

4.	What was the unit cost of labor (per class) for last month?
	$fill in the blank 5 per class

5.	*What if* Callie increased the number of classes offered by 50 percent?

a.	What would be the total labor cost?
	$fill in the blank 6
b.	The unit labor cost? If required, round your answer to the nearest cent.
	$fill in the blank 7 per class
c.	Why did the unit labor cost decrease?