Question

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

Answer 1

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

Step-by-step 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 =
`(Total annual cost)/(quarter)`

=
`(128600)/(4)`

= $32,150