account analysis raymondo s restaurant wants to find an equatio 268138

Account analysis. Raymondo’s Restaurant wants to find an equation to estimate monthly utility costs. Raymondo’s has only been in business for one month, January 2008, and has the following information for utilities:

a. Electricity is billed by kilowatt hour. According to its first bill, Raymondo’s paid $573 for 3,000 kilowatt hours in January.

b. Raymondo’s contract with Waste Management for garbage pickup has Raymondo’s paying $270 once a quarter.

c. Raymondo’s phone contract includes a flat monthly fee of $20 and an additional charge of $0.03 per call. Raymondo’s made 1,200 calls in January.

1. Which of the above costs is variable? Fixed? Mixed? Explain.

2. Combine the information above to get a utility cost function for January.

3. If Raymondo’s expects to use 4,000 kilowatt hours of electricity in February, and makes the same number of calls as in January, estimate total utilities costs for February.