The previous manager of Just-for-Ladies Fitness started the following schedule,

Question

The previous manager of Just-for-Ladies Fitness started the following schedule, but left before completing it. The manager wasn't sure but thought the club's fxed operating costs were $50,000 per month and the variable operating costs were $2 per member. The club's existing facilities could serve up to 1,500 members per month. Requirements 1. Complete the schedule shown below for different levels of monthly membership assuming the previous managers 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.) 800 members 1,000 members 1,500 members Monthly Operating Costs Total variable costs Plus: Total fixed costs Total operating costs ID Variable cost per member Plus: Fixed cost per member Average cost per member

Explanation / Answer

800 Members 1000 members 1500 members Total Variable cost 1600 2000 3000 Total Fixed cost 50000 50000 50000 Total cost 51600 52000 53000 Variable cost per member 2 2 2 Fixed cost per member 62.5 50 33.33 Total cost per member 70.5 52 35.33

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