Question

Qs 14-2 fixed and variable costs lo c2 a cell phone company offers two different plans. plan a costs $80 per month for unlimited talk and text. plan b costs $0.20 per minute plus $0.10 per text message sent. you need to purchase a plan for your 14-year-old sister. your sister currently uses 1,700 minutes and sends 1,600 texts each month. (1) what is your sisters total cost under each of the two plans

Answer 1

Plan A: Post paid plan

Total cost A = $80 per month

Plan B: Pre paid plan

Total cost B = $0.20 per minute * 1,700 minutes + $0.10 per text message * 1,600 texts

Total cost B = $340 + $160

Total cost B = $500 per month

Therefore it is better to get the post paid plan, plan A.