Question: During the sixth month of the fiscal year, the program director of the Westchester Home-Delivered Meals (WHDM) program decides to again recompute fixed costs, variable costs, and the BEP using the high-low method. Here are the number of meals served and the total cost of the program for each of the first six months:

Month Meals Served Total Costs

July 3,500 20,500

August 4,000 22,600

September 4,200 23,350

October 4,600 24,500

November 4,700 25,000

December 4,900 26,000

Recompute fixed costs, variable costs, and the BEP.

a) What are the variable costs?

b) What are the fixed costs?

c) How many meals will the WHDM program need to provide during the fiscal year to reach BEP?

d) How much profit will the program earn if it completes its 45,000 meal contract with the city of Westchester?