Question

Abken’s Weekend Spa charges $75 for a two-hour all natural facial treatment. It pays a $500 annual charge plus $10 per hour for a facial massage machine used during the treatment. 30 Points

Required:

1. What is Abken’s total annual cost for the facial machine if 30 facials are sold? If 40 are sold? If 50 are sold?
2. What is the company’s cost per facial for the machine if 30 facials are sold? If 40 are sold? If 50 are sold?
3. Why does the machine’s cost per facial differ at the three levels of activity?

Answer 1