Homework Answers
The given equation for total cost is
| Total cost = $120100 + $0.20X |
Where 'X' is the number of customer transactions forecast in a month.
We know from the given data that the total cost is $230400
Hence we will substitute the known data in the equation to find out number of customer transactions.
Therefore,
$230400 = $120100 + $0.20X
0.20X = 230400 - 120100
0.20X = 110300
X = 551500
Hence the total number of customer forecast for the month is 551500.
From the given data we can predict that total variable cost of the enterprise must be equal to $0.20 × 551500= 110300----------------(A)
We will equate this to the total variable cost of the enterprise.
i.e. Total variable cost = $35100 + Variable cost of supervision + $25300 + $11300
110300= $71700 + Variable cost of supervision ----------(From A)
Variable cost of supervision = $38600
Since total cost of supervision is $47000
i.e Variable cost of supervision + Fixed cost of supervision = $47000
Fixed cost of supervision = $47000 - $38600
Fixed cost of supervision = $8400
Answer
| Variable cost of supervision | $38600 |
| Fixed cost of supervision | $8400 |
| Number of customer transaction | 551500 |
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