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Unformatted text preview: + 5,000b This permits us to solve for b, as follows: 2,000 = 2,000b; b = $1 We can then solve for a: a = 14,500 – 3,000 (1) = $11,500 Rent and Depreciation. This is a flat $4,000 per month. Utilities and Other. This requires following the same approach as with salaries and fringe benefits: TC = a + bx 2,100 = a + b (3,000); a = 2,100 – 3,000b 3,300 = a + b (5,000); 3,300 = (2,100 – 3,000b) + 5,000b 1,200 = 2,000b; b = $.60 a = 2,100 – 3,000(.60) a = $300 Overall. The cost equation is the sum of all of the individual elements, or TC = (11,500 + 4,000 + 300) + (6.00 + 1.00 + .60)x TC = 15,800 + 7.60x Costs in March would be predicted as 15,800 + 7.60 (10,000) or $91,800. ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••...
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This document was uploaded on 03/30/2014.

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