Spiffy Quick, Inc., operates an automobile service facility. The table below sho
ID: 2505162 • Letter: S
Question
Spiffy Quick, Inc., operates an automobile service facility. The table below shows the cost incurred during a month when 600 oil changes were done.
Number of Oil Changes
500
600
700
Total costs:
Fixed costs
A
$ 8,400
C
Variable costs
B
24,000
D
Total costs
E
$32,400
F
Cost per oil change:
Fixed cost
G
H
I
Variable cost
J
K
L
Total cost per oil change
M
N
O
Required:
Fill in the missing amounts, labeled A through O, in the table.
Number of Oil Changes
500
600
700
Total costs:
Fixed costs
A
$ 8,400
C
Variable costs
B
24,000
D
Total costs
E
$32,400
F
Cost per oil change:
Fixed cost
G
H
I
Variable cost
J
K
L
Total cost per oil change
M
N
O
Explanation / Answer
Since A & C are both fixed costs they will = $8,400. It does not matter how many oil changes are made.
In order to find out the answer for B & D you need to determine what the variable costs are per oil change. To do this we simply divide $24,000/600 oil changes = $40/oil change. Since we know this we can now calculate B & D
B= $40* 500= $20,000
D= $40*700=$28,000
Since we now know A,B,C & D we can calulate E & F by simply adding the top two numbers.
E= 8,400+20,000=28,400
F=8,400+ 28,000=36,400
Since we know how many oil changes happened and the fixed, variable, and total cost we can calulate G through O by simply division.
G= 8400/500= $16.80
H= 8400/600=$14
I= 8400/700=$12
J= 20,000/500=$40 The 20,000 comes from what we calculated for B
K=24,000/600=$40
L=28,000/700=$40 The 28,000 comes from what we calculated for D
M=28,400/500=$56.80 The 28,400 comes from what we calculated for E
N=32,400/600=$54
O=36,400/700=$52 The 36,400 comes from what we calculated for F
Hope this helps!
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