Bill Braddock is considering opening a Fast n Clean Car Service Center. He estimates that the following costs will be incurred during his first year of operations: Rent $8,800, Depreciation on equipment $7,000, Wages $16,400, Motor oil $12.00 per oil change. Oil filters will cost 5 dollars per oil change. He must also pay The Fast n Clean Corporation a franchise fee of $1.20 per oil change, since he will operate the business as a franchise. In addition, utility costs are expected to behave in relation to the number of oil changes as follows:

Number of Oil Changes 4000, 6000,9000,12000, 14000 Utility Costs 7000,8300,10600,13000,15000

Bill Braddock anticipates that he can provide the oil change service with a filter at $25 each.

(a) Using the high-low method, determine variable costs per unit and fixed costs for the utility costs.

(b) Determine the break-even point in number of oil changes and sales dollars .

(c) Without regard to your answers in parts (a) and (b), determine the margin of safety in dollars and percentage if current actual sales are $100,000 and breakeven sales are $80,000.