A real estate agent is considering changing her cell phone plan. There are two plans to choose from, all of which involve a monthly service charge of $20. Plan A has a cost of $.40 a minute for daytime calls and $.20 a minute for evening calls. Plan B has a flat rate of $80 with 250 minutes of calls allowed per month and a charge of $.38 per minute beyond that, day or evening. If the agent will use the service for daytime calls, over what range of call minutes will each plan be optimal? Plan A is optimal from zero to ( X ) minutes. Plan B is optimal from ( X ) minutes onward. In other words, if the agent use (X ) minutes, Plan A and B would be equivalent in total cost. X=?

A real estate agent is considering changing her cell phone plan. There are two plans to choose from, all of which involve a monthly service charge of $20. Plan A has a cost of $.40 a minute for daytime calls and $.20 a minute for evening calls. Plan B has a flat rate of $80 with 250 minutes of calls allowed per month and a charge of $.38 per minute beyond that, day or evening. If the agent will use the service for daytime calls, over what range of call minutes will each plan be optimal? Plan A is optimal from zero to ( X ) minutes. Plan B is optimal from ( X ) minutes onward. In other words, if the agent use (X ) minutes, Plan A and B would be equivalent in total cost. X=?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 16E

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