Question

Paul is going to have the exterior of his home painted. Painting USA charges $75.00 to come out and evaluate the house plus $25.00 per hour of labor. Upscale Home Painting does not charge to evaluate the house. However, they charge $40.00 per hour.

If it takes 25 hours to paint Paul’s house, the most cost effective company will be:

The cost of painting the house will be the same for both companies if the number of hours required to paint Paul’s house is:

Answer 1

Given:$75
25 hours

Painting USA : Fixed cost: $75 ; Variable Cost: $25x
Total Cost = 75 + 25(25) = 75 + 625 = 700

Upscale Home Painting: No Fixed Cost ; Variable Cost : $40x
Total Cost = 40(25) = 1,000

The most cost effective company will be Painting USA whose charge will amount to $700.