Answer:
a)Total Labor Cost = $600x + $30y.
b) Total variable cost = $3000.
c) Total labor cost last month = $6000.
d) Unit cost of labor per class = $60.
e) Total variable labor cost = $30 * 150 = $4500, Total Labor Cost = $3000 + $4500 = $7500, and Unit cost of labor per class = $7500/150 = $50.
Step-by-step explanation:
a) It is given that the labor cost includes two components: cost of trainers, which is actually their salaries, and cost of a fitness class taught. Fitness trainer costs $600 and one fitness class costs $30. Assuming there are x number of trainers and y number of classes, therefore the model can be expressed as:
Total Labor Cost = Fitness Trainer Cost * number of trainers + Fitness Class Cost * number of classes.
Total Labor Cost = $600x + $30y.
b) The total variable labor cost will be the cost spent on the number of classes. Since number of classes are 100 and the cost of one class is $30, therefore:
Total variable cost = cost of one class * number of classes.
Total variable cost = $30 * 100.
Total variable cost = $3000.
c) Furthermore, last month, x = 5 and y = 100. Plug these values in the total labor cost equation:
Total labor cost last month = $600(5) + $30(100).
Total labor cost last month = $3000 + $3000.
Total labor cost last month = $6000.
d) The total labor cost is $600. Number of classes are 100. Therefore:
Unit cost of labor per class = Total Labor Cost/Number of classes.
Unit cost of labor per class = $6000/100.
Unit cost of labor per class = $60.
e) If the number of classes are increases by 50%, this means that the number of classes will be 150 instead of 100. Therefore:
Total variable labor cost = $30 * 150 = $4500.
Total Labor Cost = $3000 + $4500 = $7500.
Unit cost of labor per class = $7500/150 = $50!!!
