Benny is the manager of an office-support business that supplies copying, binding, and other services for local companies. He must replace a worn-out copy machine that is used for black-and-white copying. He is considering two machines, and each of these has a monthly lease cost plus a cost for each page that is copied. Machine 1 has a monthly lease cost of $619, and there is a cost of $0.030 per page copied. Machine 2 has a monthly lease cost of $675, and there is a cost of $0.028 per page copied. Customers are charged $.16 per page copied. If Benny expects to make 105,000 copies per month, what would be the monthly cost for each machine

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Answer:

Machine one cost:

= Fixed cost + Variable cost

The Fixed cost is the lease cost and the variable cost is the cost per page copied. The number of pages is 105,000 and the cost per page for machine 1 is $0.030

= 619 + (0.030 * 105,000)

= $3,769 monthly

Machine two cost:

= 675 + (0.028 * 105,000)

= $3,615 monthly