What is the 2009 service cost for Havana's plan?

Question

Quizplus · Accepted Answer

The passage states that the service cost for Havana's plan in 2008 was $540,000 and that there was a 20% decrease in the cost for 2009. Therefore, the service cost for 2009 would be 80% of $540,000, which is $432,000. However, the passage also states that there was an additional fixed cost of $216,000 for 2009, so the total service cost for 2009 would be $648,000 (432,000 + 216,000). Therefore, the correct answer is C.

What Is the 2009 Service Cost for Havana's Plan