Question

Phi upsilon nu, a student social organization, has two different locations under consideration for constructing a new chapter house. phun's 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: annual operating costs locationfixedvariable alpha avenue10,000300 per person beta blvd.16,000200 per person what would be total annual costs for the alpha ave. location with 20 persons living there?

1) $4,000
2) $10,000
3) $16,000
4) $20,000
5) $26,000

Answer 1

The correct answer is 3. The total annual costs for the Alpha Ave. location for the student social organization PHUN, with 20 persons, would be $16,000, calculated by adding the fixed costs of $10,000 to the variable costs ($300 per person times 20 persons).

Step-by-step explanation:

The question relates to calculating total annual costs for the Alpha Ave. location for Phi Upsilon Nu (PHUN), a student social organization, given a certain number of persons living there. With provided fixed and variable costs, we can determine these costs using a simple formula:

Total Annual Cost = Fixed Cost + (Variable Cost per Person × Number of Persons)

For the Alpha Ave. location, the fixed cost is $10,000 annually, and the variable cost is $300 per person. Given that there are 20 persons living there, we can calculate the total annual costs as follows:

Total Annual Cost = $10,000 + ($300 × 20) = $10,000 + $6,000 = $16,000

Therefore, the total annual costs for the Alpha Ave. location with 20 persons living there would be $16,000.