Question

Print item High-Low Method Luisa Crimini has been operating a beauty shop in a college town for the past 10 years. Recently, Luisa rented space next to her shop and opened a tanning salon. She anticipated that the costs for the tanning service would primarily be fixed but found that tanning salon costs increased with the number of appointments. Costs for this service over the past eight months are as follows: Tanning Month Total Cost Appointments January 1,600 $1,754 February 2,000 2,140 3,500 2,790 April 2,500 2,400 May 1,500 1,790 June 2,300 2,275 luly 2,150 2,200 2,640 August 3,000 Required: 1. Which month represents the high point? The low point? High point Low point Previous Next Check My Work Save and Exit Submit Assig 335 PM

Answer 1

Solution 1:

High Point = March

Low Point = May

Solution 2:

Variable rate for training = ($2790 - $1790) / (3500- 1500) = $1000/ 2000 = $0.50 \per training appointment

Fixed cost per month = $2790 - 3500*$0.50 = $1,040

Solution 3:

Total training service cost = $1040 + $0.50*Number of appointments

Solution 4:

Total Predicted cost for September = $1040 + $0.50*2500 = $2,290

Total Fixed cost for September = $1,040

Total Predicted Variable cost for September = $0.50*2500 = $1,250