Exercise 

2‐31
Part 1:  
January:    $100 + (.25 x 6,000) = $1,600
F b
February:  $100 + (.25 x 5,000) = $1,350
$100 ( 25 5 000) $1 350
Part 2:  January cost/call  = $1,600 ÷ 6,000  = $0.267
February cost/call = $1,350 ÷ 5,000 = $0.27
Part 3:
Variable Fixed Total
January calls $1,500 $100 $1,600
Part 4:
Assuming the fixed costs are covered, the marginal cost of one 
additional phone call in January is the variable cost of $0.25
dd l h ll h bl f$
Part 5:  The average cost of a phone call in January is $0.267 
($1,600 ÷ 6,000)
© Dr. Chula King
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