What is the average cost per cleaning service call for ChimneySweep?
The average cost per cleaning service call for ChimneySweep is $172.50. The average cost per cleaning service call for ChimneySweep can be calculated by considering both the variable costs and the fixed costs associated with providing the service.
Calculating the Average Cost per Cleaning Service Call
The average cost per cleaning service call for ChimneySweep can be calculated as follows:
1. Total Variable Costs per Year:
Total variable costs per year = Total variable costs per month × Number of months
Given that the variable cost per call is $35 and the company averages 100 service calls per month:
Total variable costs per month = $35 × 100 = $3,500
Total variable costs per year = $3,500 × 12 = $42,000
2. Total Costs per Year:
Total costs per year = Fixed costs per year + Total variable costs per year
Given that the fixed costs per year are $165,000:
Total costs per year = $165,000 + $42,000 = $207,000
3. Average Cost per Cleaning Service Call:
Average cost per cleaning service call = Total costs per year / Number of service calls per year
Since the company averages 100 service calls per month, the number of service calls per year is 100 × 12 = 1,200.
Average cost per cleaning service call = $207,000 / 1,200 = $172.50
Therefore, the average cost per cleaning service call for ChimneySweep is $172.50.