Square metres cleaned Overheads 15,100 12.750 $73.950 When more than 14,000 square metres are industrially cleaned, there will be a step up in fixed costs of $4,700 Required
<h3>How to calculate the estimated total cost if 14,500 square metres are to be industrially cleaned.?</h3>
Total cost of 15,100 square metres 83,585
Total cost of 12,750 square metres 73,950
Variable cost of 2,350 square metres 9,635
Variable cost is $9,635/2,350 square metres = $4.10 per square metre. Fixed costs can be found by substitution:
Total cost of 12,750
square metres 73,950
Variable cost of 12,750 square metres (x $4.10) 52,275
Fixed costs 21,675
So for 14,500 square meters:
Overheads = $21,675 + (14,500 x $4.10)= $ 27415
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