Answer:
The correct answer is (B) U$ 9.00 for (a) truck and U$ 6.00 for (b) train.
Explanation:
Average Cost = Total Cost/ Total miles Run = Total Cost/ 5000
Total Miles Run = 5000
a) Calculations FOR TRUCK
Data that is given:
$ 26,000 upfront;
U$ 2.00 in gas per mile run
Maintenance costs U$ 4,000 per year
Additional U$ 1.00 per mile run
Total Miles Run = 5000
Total Cost = 26000 + 2*Total Miles Run + 4000 + 1*Total Miles Run = 26000+2*5000+4000+5000= $45000
⇒Average Cost of a TRUCK = Total Cost/5000 = 45000/5000 = $9
b) Calculations for train:
It costs U$ 10.000 per year
$ 4.00 per mile to move orders around
Total Cost for Train = 10000 + 4*Total Miles Run = 10,000 + 4*5000 = 30,000.
⇒Average Cost of Train for That year = Total Cost of Train/ 5000 = 30,000/5,000 = $6
So, $9.00 for truck and $6.00 for train.
