Pacific Bank's startup division establishes new branch banks. Each branch opens with three tellers. Total teller cost $90,000 per yr. The 3 combined process up to 90,000 transactions per year. If a branch doesn't attain at least 60,000 transactions during the 1st yr; it is closed. If demand exceeds 90,000, additional tellers are hired, branch is transferred from start-up to regular operation.
What is the relevant range of activity for new branch banks?
Evaluate amt of teller cost for a branch that process 60,000, 70,000, 80,000, or 90,000 transactions. Is the teller cost a fixed or a variable cost?
Determine amount of teller in total and teller cost per branch, assuming the startup is operates 10,20,15, 25 branches. In this case is the teller cost fixed or variable?