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Water Safety, Inc., hires several instructors who provide weekly one-hour swim lessons

to individuals. The

company would like to estimate costs associated with its swim lessons on a weekly basis. Assume costs for towels, snacks, drinks, and instructor wages are variable costs. The accounting records indicate the following costs were incurred last week for 250 customer lessons:

Towels, snacks, drinks $1,250

Instructor wages (hourly employees) $3,000

Manager (owner) salary $1,500

Pool rental $2,000

a. Use account analysis to estimate total fixed costs per week, and the variable cost per lesson. State

your results in the cost equation form Y = f + vX by filling in the dollar amounts for f and v.

b. Estimate the total costs for this coming week assuming 220 lessons will be provided

Top Answer

a) Cost equation would be : Y = $3,500 +... View the full answer

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