How to Calculate Fixed and Variable Cost for Shampoo and Conditioner Bottles?

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Discussion Overview

The discussion revolves around calculating fixed and variable costs for shampoo and conditioner bottles in a convenience store context. Participants explore how to interpret the costs associated with purchasing these products, including the implications of a discount rate.

Discussion Character

  • Homework-related
  • Debate/contested
  • Exploratory

Main Points Raised

  • One participant suggests that the $100 is a fixed cost, as it remains constant regardless of the number of shampoo bottles shipped.
  • Another participant agrees that the variable cost can be calculated by multiplying the number of conditioner bottles by their per-bottle price.
  • A participant questions whether the problem is clear, noting that the $100 might imply unlimited shampoo bottles and expressing uncertainty about the relevance of the discount rate.
  • Some participants argue that the conditioner cost should be considered a variable cost due to its per-bottle pricing structure.
  • One participant proposes a calculation for the variable cost based on the number of conditioner bottles purchased, while another suggests applying the discount to the per-bottle price of conditioner.

Areas of Agreement / Disagreement

There is no consensus on the interpretation of variable costs, with some participants asserting that the conditioner cost is variable while others question the presence of any variable costs at all. The relevance of the discount rate is also debated.

Contextual Notes

Participants express uncertainty regarding the clarity of the problem statement and the role of the discount rate, indicating potential limitations in the information provided.

jdawg
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Hi! I'm having some trouble with this problem!

A small convenience store pays $100 for a constant supply of shampoo bottles. 20 bottles are shipped to the small business. The convenience store then purchases 30 bottles of conditioner for $6 per bottle. What is the fixed and variable cost for the shampoo and conditioner bottles combined? The discount rate is 12%.

I was thinking that the $100 was the fixed cost... but I feel like that isn't right. I'm not really sure where to start on this problem. Usually for these problems I put them into a graph in excel and just use y=mx+b to find the fixed and variable cost, but I'm not sure how to do that with this information. Also, is the discount rate important in this problem or was that thrown in there to confuse me?

Thanks!
 
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You are right. The fixed cost is $100 because it is a fixed $100 no matter how many bottles are shipped. The variable cost is the cost that is on a per-bottle basis.
 
Ok, awesome! So to calculate the variable cost you just multiply the 30 bottles times $6 and then how do you take into account the shampoo bottles? Do you just divide the $100 by 20 to get the per bottle price of shampoo?
 
The problem seems unclear. It sounds like the $100 would buy as many shampoo bottles as needed. And what is the discount on? I agree that it might just be to confuse. Is there an example that you are supposed to mimic about these questions? I can't help any more. All I can say is that your understanding of fixed and variable seems correct.
 
Right? Most of the questions in this class have been extremely unclear, its so frustrating. I don't have a sample question to look at unfortunately. Thanks so much for helping though, I feel better knowing someone agrees with my way of solving this!
 
The cost of the shampoo is a fixed cost - x dollers get y shampoo bottles.
Same is true of the conditioner bottles.
I don't see what variable cost there is here or what discount has to do with it.
 
Do you think this is just a trick question? Like there is no variable cost and the discount rate is just thrown in there for no reason?
 
The way the problem is stated: "30 bottles of conditioner for $6 per bottle" makes me think that the conditioner is meant to be a variable cost. Any cost that is a "per bottle" cost is variable with respect to the number of bottles bought. If all costs were really fixed, than the store should order a million bottles for that fixed cost and could sell them for pennies at a profit.
 
Thanks! I guess I'll just say that the fixed cost is $100 and the variable cost is $180. Hopefully that is right!
 
  • #10
Express the variable cost on a per/sale basis. fixed=$100; variable=$6/bottle. My guess is that the 12% discount should be applied to the $6 to get $5.28.
 
  • #11
Awesome idea! I'll do that then, I really appreciate all the help!
 

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