Peter runs a photographic stud

Peter runs a photographic studio. Clients book a one-hour studio session and are entitled to receive two large photographs of their choice form the sitting. Peter has provided the following information regarding his business: Identify Peter’s fixed cost and calculate the total fixed cost he will incur each year.

  1. The rent of the studio is £12,000 per annum.
  2. Peter’s employees two full-time photographers, each paid a salary of £22,000 per annum.
  3. He employs one photographic technician for one day a week. He is paid £120 per day, £6,240 per annum.
  4. Advertising costs are £550 per annum.
  5. Electricity costs are £1,100 per annum plus £4 per client hour. Each sitting takes two hours.
  6. Peter works as a receptionist and general manager of the business and is paid £16,000 per annum.
  7. Fixtures, fittings, and equipment originally cost Peter £12,800 and will depreciate by £2,500 per annum.
  8. Peter expects to have 1,300 sittings per year; each sitting is charged at £80. (Identify Peter’s fixed cost and calculate the total fixed cost he will incur each year.)

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