Question

Assume Cape Cod Railway is considering hiring a reservations agency to handle passenger reservations. The agency would charge a flat fee of $10,000 per month, plus $2 per passenger reservation. What is the total reservation cost if 200,000 passengers take the trip next month? O A. $10,000 B. $400,000 C. $2.05 D. $410,000

Answer 1

Correct answer--------------(D) $410,000

Working

Fixed charge	$    10,000
Variable cost (200000 x $2)	$ 400,000
Total expected reservation cost	$ 410,000