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Costs

Daytime Evening
A 0.45 0.2
B 0.55 0.15
Flat with 200 min beyond
C $ 80.00 0.4
Answer-a Total Charge
Day Calls Evening Calls Fixed charge Total Costs
A 120 40 20 $ 82.00
B 120 40 20 $ 92.00
C 120 40 20 $ 100.00

Answer-b Daytime Calling Minutes Total Monthly Costs


A 120 82
B 120 92
C 120 100

Answer C A Less than 178 min


B $ 145.45
C >178 minutes

answer D
Answer B
140

120

100

80

60

40

20

0
A B C
Daytime Cal l i ng Mi nutes Total Monthl y Costs
Internal 1 2
Variable costs 17 14
Annual fixed Costs 200,000 240000

Vendors A B C
Price/unit 20 22/18 21/19
volume 30,000 <1000/>1000 <1000/>1000

Answer A Units Units


10000 20000

i1 370000 540000
i2 380000 520000
A 200000 400000
B 180000 360000
C 192000 382000

Vendor B is Best Vendor B is Best


Customers/day 100

1 2
Fixed Cost 2000 3800
VC/customer 20 20
Revenue/custom 45 45

Break Even

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