Question

Marta estimates that the fixed costs associated with opening her new hair salon are $100,000. She expects the salon to attract 500 new customers in the first year, each of which will cost $25 to service. Marta expects to generate $50,000 per year in revenue. For Marta, the total cost of opening her hair salon and staying in business for one year will be

Answer 1

Marta expects $50,000 in revenue, but that's not cost, so we can nevermind that.

the "fixed cost" namely overhead just to open the doors is $100,000.

she's expecting 500 folks, each will incur costs of $25 a pop, so for all 500 that'd be 500* 25 or 12500 total.

so Marta's total cost is the overhead and 25 per 500 folks, namely 100,000 + 12500 = 112,500.