Kodama Corporation staffs a helpline to answer questions from customers. The costs of operating the helpline are variable with respect to the number of calls in a month. At a volume of 30,000 calls in a month, the costs of operating the helpline total $369,000. To the nearest whole dollar, what should be the total cost of operating the helpline costs at a volume of 33,800 calls in a month? (Assume that this call volume is within the relevant range.)
A)$369,000
B)$327,515
C)$392,370
D)$415,740

Question

Quizplus · Accepted Answer

We can use the formula for a variable cost function:

Total Cost = Variable Cost per Unit x Number of Units

Let's call the variable cost per call "v". We know that at 30,000 calls, the total cost is $369,000. So:

$369,000 = 30,000v
v = $12.30 per call

Now we can use this variable cost per call to find the total cost at 33,800 calls:

Total Cost = $12.30 x 33,800
Total Cost = $415,740

Therefore, the total cost of operating the helpline at a volume of 33,800 calls in a month should be $415,740. The correct answer is (D).

Kodama Corporation Staffs a Helpline to Answer Questions from Customers