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:Alpha Ave - $500 fixed $200 variable per personBeta Bld. - $$800 fixed $150 variable per personWhat would be the total annual costs for the Alpha Ave. location with 20 persons living there?a. $5,400b. $4,000c. $5,000d. $7,000e. $9,000

Answer 1

total annual costs for the Alpha Ave = 9000

so correct option is e. $9,000

Step-by-step explanation:

given data

Alpha Ave = $500 fixed $200 variable per person

persons living = 20

and

Beta Bld = $800 fixed $150 variable per person

to find out

the total annual costs for the Alpha Ave

solution

we get here only total annual costs for the Alpha Ave that is express as

total annual costs for the Alpha Ave = fix cost + ( variable cost × persons living ) ........................1

put here value we get

total annual costs for the Alpha Ave = 5000 + ( 200 × 20 )

total annual costs for the Alpha Ave = 9000

so correct option is e. $9,000