A company is considering two insurance plans with the following types of coverage and premiums:Plan A Plan BFire/Theft$26,000 $33,000LiabilityMonthly Premium $80$177,000 $139,000$72Premiums are sold in units. For example, one can buy one unit of plan A insurance for $80 per month and receive $26,000 in Fire/Theft insurance. Twounits of plan A insurance cost $160 per month and give $52,000 in Fire/Theft insurance.The company wants at least $774,000 in coverage for Fire/Theft insurance and $4,070,000 in coverage for liability insurance.How many units of each plan should be purchased to meet the needs of the company while minimizing cost?The company should purchaseunits of plan A andWhat is the minimum monthly premium for the company? $units of plan B.

Let, Number of units of plan A purchased by company = xNumber of units of plan B purchased by…

Answered: How many units of each plan should be…

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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How many units of each plan should be purchased to meet the needs of the company while minimizing cost? The company should purchase units of plan A and What is the minimum monthly premium for the company? $ units of plan B.