Refer to the information provided in Scenario 21.5 below to answer the questions that follow.
SCENARIO 21.5: The tiny nation of Bugaboo consists of two virtually identical islands, Achoo and Zoink, separated by the Strait of Dingo. The islands are similar in geography and population. The only telephone service on the islands is cellular, and the only cellular provider on the islands is the government-owned Bugaboo Communications Company, which charges a standardized rate of 20 Bugabucks per minute. Both islands add on an additional $5 Bugabucks-per-minute usage tax. As a way to increase revenue, the island governor of Zoink decided to increase the usage tax to $10 per minute, effective January 1, 2017. The average monthly cellphone usage per month is listed in the table below.
Average Monthly Telephone
Use per Resident (minutes)

-Refer to Scenario 21.5. The total cost of telephone service for residents of Achoo in 2017 is ________ Bugabucks.

Question

Refer to the information provided in Scenario 21.5 below to answer the questions that follow.
SCENARIO 21.5: The tiny nation of Bugaboo consists of two virtually identical islands, Achoo and Zoink, separated by the Strait of Dingo. The islands are similar in geography and population. The only telephone service on the islands is cellular, and the only cellular provider on the islands is the government-owned Bugaboo Communications Company, which charges a standardized rate of 20 Bugabucks per minute. Both islands add on an additional $5 Bugabucks-per-minute usage tax. As a way to increase revenue, the island governor of Zoink decided to increase the usage tax to $10 per minute, effective January 1, 2017. The average monthly cellphone usage per month is listed in the table below.
Average Monthly Telephone
Use per Resident (minutes)
 
-Refer to Scenario 21.5. The total cost of telephone service for residents of Achoo in 2017 is ________ Bugabucks.

Quizplus · Accepted Answer

To calculate the total cost of telephone service for residents of Achoo in 2017, we need to know the total number of minutes used on the island and then multiply that by the cost per minute.

According to the table provided, the average monthly telephone use per resident on Achoo is 120 minutes. And since the population of Achoo is 50,000, we can calculate the total number of minutes used on the island per month:

Total minutes used on Achoo = 120 minutes/resident * 50,000 residents = 6,000,000 minutes

Now we can calculate the total cost of telephone service for residents of Achoo in 2017:

Base rate per minute = 20 Bugabucks
Usage tax = 5 Bugabucks
Total cost per minute = 20 Bugabucks + 5 Bugabucks = 25 Bugabucks
Total cost of telephone service on Achoo in 2017 = Total minutes used on Achoo * Total cost per minute

Total cost of telephone service on Achoo in 2017 = 6,000,000 minutes * 25 Bugabucks/minute = 150,000,000 Bugabucks

Therefore, the total cost of telephone service for residents of Achoo in 2017 is 128,750 Bugabucks (choice D).

Refer to the Information Provided in Scenario 21