Question

Exercise 2-11 Oriole Flower Cart incurred the following monthly costs. Bouquets Sold 5,000 7,500 10,000 Balloons (10 per bouquet) $13,537 $16,064 $18,614 $ 5,000 $ 6,742 $ 5,000 $ 8,554 $ 5,000 Insurance Delivery $10,354 Employee compensation $12,421 $14,056 $15,681 $ 1,500 $ 1,500 $ 1,500 Advertising Using the form y = mx + b, estimate the cost formula for each cost incurred by Oriole Flower Cart. (Round unit cost to 2 decimal places, e.g. 52.75. If the cost equation has no variable component enter 0 for the amount.) Balloons y = $ Insurance y = $ y = $ Delivery %D х+ $ Employee compensation y = $ x + $ Advertising y = $

Answer 1

Balloons	Y = $1.02X + $8414
Insurance	Y = $0.00X + $5000
Delivery	Y = $0.72X + $3154
Employee compensation	Y = $0.65X + $9181
Advertising	Y = $0.00X + $1500

Balloons

Variable cost = (18614-13537)/(10000-5000) = $1.02

Fixed cost = 18614-(1.02*10000) = 8414

Delivery

Variable cost = (10354-6742)/(10000-5000) = $0.72

Fixed cost = 10354-(0.72*10000) = 3154

Employee compensation

Variable cost = (15681-12421)/(10000-5000) = $0.65

Fixed cost = 15681-(0.65*10000) = 9181