A real estate agent is considering changing her land line phone plan. There are three plans to choose from, all of which involve amonthly service charge of $20. Plan A has a cost of $.37 a minute for daytime calls and $.16 a minute for evening calls. Plan B has acharge of $.46 a minute for daytime calls and $.14 a minute for evening calls. Plan C has a flat rate of $75 with 300 minutes of callsallowed per month and a charge of $.34 per minute beyond that, day or evening.a. Determine the total charge under each plan for this case: 130 minutes of day calls and 50 minutes of evening calls in a month. (Donot round intermediate calculations. Round your answer to 2 decimal places.)Cost for Plan ACost for Plan BCost for Plan C$$$b. If the agent will only use the service for daytime calls, over what range of call minutes will each plan be optimal? (Round eachanswer to the nearest whole number. Include the indifference point itself in each answer.)Plan A is optimal from zero toPoint of indifference76.1086.8095.00minutes. Plan C is optimal fromc. Suppose that the agent expects both daytime and evening calls. At what point (i.e., percentage of total call minutes used for daytimecalls) would she be indifferent between plans A and B? (Do not round intermediate calculations. Enter your answer as a percentagerounded to 2 decimal places. Omit the "%" sign in your response.)minutes onward.percent daytime minutes

There are two types of costs in the business. One is fixed costs and other is variable cost. Fixed…

a. Determine the total charge under each plan for this case: 130 minutes of day calls and 50 minutes of evening calls in a month. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Cost for Plan A Cost for Plan B Cost for Plan C $ $ $ 76.10 86.80 95.00 b. If the agent will only use the service for daytime calls, over what range of call minutes will each plan be optimal? (Round each answer to the nearest whole number. Include the indifference point itself in each answer.) Plan A is optimal from zero to minutes. Plan C is optimal from minutes onward. c. Suppose that the agent expects both daytime and evening calls. At what point (i.e., percentage of total call minutes used for daytime calls) would she be indifferent between plans A and B? (Do not round intermediate calculations. Enter your answer as a percentage

a. Determine the total charge under each plan for this case: 130 minutes of day calls and 50 minutes of evening calls in a month. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Cost for Plan A Cost for Plan B Cost for Plan C $ $ $ 76.10 86.80 95.00 b. If the agent will only use the service for daytime calls, over what range of call minutes will each plan be optimal? (Round each answer to the nearest whole number. Include the indifference point itself in each answer.) Plan A is optimal from zero to minutes. Plan C is optimal from minutes onward. c. Suppose that the agent expects both daytime and evening calls. At what point (i.e., percentage of total call minutes used for daytime calls) would she be indifferent between plans A and B? (Do not round intermediate calculations. Enter your answer as a percentage

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A real estate agent is considering changing her land line phone plan. There are three plans to choose from, all of which involve a
monthly service charge of $20. Plan A has a cost of $.37 a minute for daytime calls and $.16 a minute for evening calls. Plan B has a
charge of $.46 a minute for daytime calls and $.14 a minute for evening calls. Plan C has a flat rate of $75 with 300 minutes of calls
allowed per month and a charge of $.34 per minute beyond that, day or evening.
a. Determine the total charge under each plan for this case: 130 minutes of day calls and 50 minutes of evening calls in a month. (Do
not round intermediate calculations. Round your answer to 2 decimal places.)
Cost for Plan A
Cost for Plan B
Cost for Plan C
$
$
$
b. If the agent will only use the service for daytime calls, over what range of call minutes will each plan be optimal? (Round each
answer to the nearest whole number. Include the indifference point itself in each answer.)
Plan A is optimal from zero to
Point of indifference
76.10
86.80
95.00
minutes. Plan C is optimal from
c. Suppose that the agent expects both daytime and evening calls. At what point (i.e., percentage of total call minutes used for daytime
calls) would she be indifferent between plans A and B? (Do not round intermediate calculations. Enter your answer as a percentage
rounded to 2 decimal places. Omit the "%" sign in your response.)
minutes onward.
percent daytime minutes

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