Question

Exercise 2-11

Pharoah Flower Cart incurred the following monthly costs.

			Bouquets Sold
			5,000				7,500				10,000
Balloons (20 per bouquet)			$	14,287			$	16,709			$	19,134
Insurance			$	5,000			$	5,000			$	5,000
Delivery			$	5,782			$	7,934			$	10,084
Employee compensation			$	13,513			$	14,723			$	15,948
Advertising			$	1,500			$	1,500			$	1,500

Using the form y = mx + b, estimate the cost formula for each cost incurred by Pharoah Flower Cart. (Round unit cost to 2 decimal places, e.g. 52.75. If the cost equation has no variable component enter 0 for the amount.)

Balloons		y =	$ x	+	$
Insurance		y =	$ x	+	$
Delivery		y =	$ x	+	$
Employee compensation		y =	$ x	+	$
Advertising		y =	$ x	+	$

Answer 1

Balloons Variable Cost = 16709 -14287 7500 - 5000 2422 = 0,9688 2500 fixed cost = 16709- 7500 X 0.9688 = 9443 I y = 0.9688 X + 9443 - Insurance Ly=ox+ 5000 O. 8608 → Deliveay = 7934–5782 7500-5000 COST 7934 – 750D X08608 = 1478 y = 0.8608 x + 1478 14 723-13513 = Employee compensation - 7500-5000 - 0.484 Fixed Cost = 14723- 7500X0.484 - 11093 4 = 0.484 x + 11093 2) Advertising > y = ox t 1500 í y = 1500