PLEASE ANSWER THIS COMPLETELY AND SHOW ALL THE STEPS IF YOU CAN PLEASE. The prev

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PLEASE ANSWER THIS COMPLETELY AND SHOW ALL THE STEPS IF YOU CAN PLEASE.

The previous manager of Kids Gym started the following schedule, but left before completing it. The manager wasn't sure but thought the club's fixed operating costs were $10,000 per month and the variable operating costs were S8 per member. The club's existing facilities could serve up to 1,000 members per month. Requirements 1. Complete the schedule shown below for different levels of monthly membership assuming the previous manager's cost behavior estimates are accurate 2. As the manager of the fitness club, why shouldn't you use the average cost per member to predict total costs at different levels of membership? Requirement 1. Complete the following schedule for different levels of monthly membership assuming the previous manager's cost behavior estimates are accurate. Round all unit costs to the nearest cent.) 100 members 500 members 1,000 members Monthly Operating Costs Total variable costs Plus: Total fixed costs Total operating costs Variable cost per member Plus: Fixed cost per member Average cost per member Requirement 2. As the manager of the fitness club, why shouldn't you use the average cost per member to predict total costs at different levels of membership? The average cost per member should not be used to predict total costs at different volumes of membership because The average cost per member I due to the

Explanation / Answer

1.

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2.

The average cost per member should not be used to predict total costs at different volumes of membership because fixed cost per member decreases with the increase in members.

The average cost per member decreases due to the increase in members.

Monthly Operating Costs 100 members 500 members 1,000 members Total variable costs 800 (8*100) 4,000 (8*500) 8,000 (8*1,000) Plus : Total fixed costs 10,000 10,000 10,000 Total operating costs 10,800 14,000 18,000

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