Question

What are the expected average quarterly costs of running a consulting practice if fixed costs are expected to be $4,600 a month and variable costs are expected to be $180 per client for each quarter? Expected number of clients for the year are (Do not round intermediate calculations): Jan-March July-Sep Oct-Dec April-June 165 135 155 100

Answer 1

Answer : $38775

Calculated as

	Units		Per Unti Variable cost		Total Variable Cost		Fixed Cost		Total Quarterly Cost
Jan-March	135	x	$                                  180	=	$                       24,300	+	$        13,800	=	$                         38,100
April - June	165	x	$                                  180	=	$                       29,700	+	$        13,800	=	$                         43,500
July-Sep	155	x	$                                  180	=	$                       27,900	+	$        13,800	=	$                         41,700
Oct-Dec	100	x	$                                  180	=	$                       18,000	+	$        13,800	=	$                         31,800
Total Annual Cost									$                      155,100
Average Quarterly Cost = $155100/4									$                         38,775

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