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What are the expected average quarterly costs of running a consulting practice if fixed costs are expected to be $5,300 a month and variable costs are expected to be $130 per client for each quarter? Expected number of clients for the year are:

Jan-Mar 110

Apr-Jun 140

Jul-Sep 150

Oct-Dec 100

Respuesta :

Answer: Expected average quarterly costs is $32,150.

Explanation:

Given that,

Fixed cost = $5,300 a month

Variable costs are expected to be $130 per client for each quarter.

Total Annual Cost = Fixed Cost + Variable cost

= $5,300 × 12 + (110 + 140 + 150 + 100) × $130

= 63600 + 65000

= $128600

Expected average quarterly costs = [tex]\frac{Total annual cost}{quarter}[/tex]

=  [tex]\frac{128600}{4}[/tex]

= $32,150

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