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roger estimates that the fixed costs associated with opening a new bank branch are $500,000. he expects the branch to attract 1,000 new customer accounts in the first year, each of which will cost $50 per year to service. he also expects to generate $100,000 per year in revenue. the total cost of opening the new branch and remaining open for one year will be

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Roger estimates that the fixed costs associated with opening a new bank branch are $500,000. $ 550000 total cost of opening the new branch.

Variable costs are costs that vary with changes in quantity. Examples of variable costs include raw materials, parts labor, production materials, handling charges, shipping charges, packaging materials, and credit card fees. In some fiscal documents, the variable cost of production is called "cost of goods sold."

Calculating the problem:

Fixed cost = $500,000

Variable cost is based on the number of customers

Number of customer = 1000

Variable cost = $50

Total variable cost = 1000 × $50

                              = $50000

Total cost = Fixed cost + variable cost

                   =$500000 +$50000

                     =$550000

Why charge variable costs?

Variable costs are essential for successful investors to determine a fixed price percentage and predict how a company will pay off under various operating conditions.

Learn more about variable cost:

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