The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' 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: $$\begin{array} { l c c }
\text { Location } & \text { Annual Fixed } & \text { Variable } \
\hline \text { Alpha Ave. } & \$ 5,000 & \$ 200 \text { per person } \
\text { Beta Blvd. } & \$ 8,000 & \$ 150 \text { perperson }
\end{array}$$ What would be total annual costs for either location at the point of indifference?
A) $13,000
B) $13,350
C) $9,000
D) $17,000
E) $19,200

Question

The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' 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: $$\begin{array} { l c c } 
\text { Location } & \text { Annual Fixed } & \text { Variable } \
\hline \text { Alpha Ave. } & \$ 5,000 & \$ 200 \text { per person } \
\text { Beta Blvd. } & \$ 8,000 & \$ 150 \text { perperson }
\end{array}$$ What would be total annual costs for either location at the point of indifference?
A) $13,000
B) $13,350
C) $9,000
D) $17,000
E) $19,200

Quizplus · Accepted Answer

The Answer of The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' 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: $$\begin{array} { l c c } 
\text { Location } & \text { Annual Fixed } & \text { Variable } \
\hline \text { Alpha Ave. } & \$ 5,000 & \$ 200 \text { per person } \
\text { Beta Blvd. } & \$ 8,000 & \$ 150 \text { perperson }
\end{array}$$ What would be total annual costs for either location at the point of indifference?
A) $13,000
B) $13,350
C) $9,000
D) $17,000
E) $19,200

The Skulls, a Student Social Organization, Has Two Different Locations