As the new manager of a local fitness club, Gifted & Lifted,you have been studying
the club’s financial data. You would like to determine how theclub’s costs behave in
order to make accurate predictions for next year. Here is theinformation from the
last six months:
Month | Club enrollment (# of members) | Total operating costs | Operating Costs per member |
July | 450 | $8,900 | $19.78 |
August | 480 | $9,800 | $20.42 |
September | 500 | $10,100 | $20.20 |
October | 550 | $10,150 | $18.45 |
November | 560 | $10,500 | $18.75 |
December | 525 | $10,200 | $19.43 |
1-By looking at the “Total Operating Costs” and the “OperatingCosts per Member,” can you tell whether the club’s operating costsare variable, fixed, or mixed? Explain your answer
2- List 10 costs the club might have and be sure to label them“fixed” or “variable”
3-Use high-low method to determine the club’s monthly operatingcost equation.
4-Using the answer from number 3, predict the total monthlyoperating costs if the club has 800 members. What if instead youhave 390 members? 1,000 members?
5-Can you predict total monthly operating costs if the club has3,000 members? Explain your answer
