Bodine Corp. has a contract to deliver cleaning products to the community center. The contract with the aquatic center states that the first 500 gallons of cleaner will cost $16 per gallon. However, the cost will drop to $12 per gallon for all purchases over 500 gallons. Based on its experience, Bodine Corp. estimates that the center will use 800 gallons of chemicals. What transaction price per gallon should Chlorine use for this contract?
A) $16.00
B) $14.50
C) $14.00
D) $12.00

Question

Quizplus · Accepted Answer

The transaction price per gallon is calculated by taking the total cost for 800 gallons and dividing by 800. The first 500 gallons cost $16 each, totaling $8,000. The remaining 300 gallons cost $12 each, totaling $3,600. The total cost is $11,600, and dividing by 800 gallons gives a transaction price of $14.50 per gallon.