The highest sales is $55,000 and lowest sales is $45,000
The highest maintenance cost is $700,000 and lowest maintenance cost is $ 500,000
Fixed cost = Maintenance cost at highest sales - variable rate sales at highest maintenance cost
Fixed cost = $ 55,000 - 0.05 $ 700,000
Fixed cost = $ 20,000
Total cost = Fixed cost + variable cost
Total cost = $ 20,000 + 0.05 Sales
Using the above equation, the maintenance cost for each month is obtained as shown in the table
Month | Estimated Maintenance cost | Sales |
January | $50,000 | $600,000 |
February | $55,000 | 700,000 |
March | $47,500 | 550,000 |
April | $52,500 | 650,000 |
May | $45,000 | 500,000 |
June | $50,500 | 610,000 |
101Wing Mathematical Problems ulllllig 2/2562 1. Aor Hardware Inc, operates a chain of four retail stores....