Reference no: EM132650832

Kyle Hepworth has been running a beauty supply store in a student town for 10 years. Kyle rents a place near his shop and opens a tanning salon. He anticipated the cost of darkening services would be fixed, but also found that tanning salon costs would increase as the number of treatments increased. Below are the fees for this service for the past eight months.

Month                   Total Treatment                      Total Cost
January                      700                                $ 1,758
February                  2,000                                  2,140
March                     3,100                                  2,790
April                       2,500                                  2,400
May                        1,500                                1,800
June                         2,300                              2,275
July                           2,150                            2,200
August                          3,000                            2,640

Requested:

Question 1) What month shows the highest and lowest points?

Question 2) Using the height-low method, calculate the variable cost per unit for the darkening treatment! Calculate the fixed costs per month!

Question 3) Using your answer to request number 2, write the cost formula for tanning services!

Question 4) Calculate the predicted total cost in September for 2,500 treatments using the formula you created in request number 3! Of these costs, how much are the fixed costs for September? What are the predicted variable costs for September?