The Skulls, a student social organization, has two different locations under con
ID: 396876 • Letter: T
Question
The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' president, a POM student, estimates that due to differing land costs, utility rates, etc., both fixed and variable costs would be different for each of the proposed sites, as follows:
What would be the total annual costs for the Alpha Ave. location with 20 persons living there?
Multiple Choice
$7,000
$9,000
$5,000
$5,400
$4,000
Location Annual Fixed Variable Alpha Ave. $ 5,000 $ 200 per person Beta Blvd. $ 8,000 $ 150 per personExplanation / Answer
Actual annual cost
= Annual fixed cost + Variable cost / person x Number of persons living
Therefore,
Annual cost for Alpha Avenue
= $5000 + $200 x 20
=$5000 + $4000
= $9000
ANSWER : $9,000
ANSWER : $9,000
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