The Skulls, a Student Social Organization, Has Two Different Locations

question 55

Multiple Choice

The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' president, a POM student, estimates that due to differing land costs, utility rates, etc., both fixed and variable costs would be different for each of the proposed sites, as follows: $$\begin{array} { l c c } \text { Location } & \text { Annual Fixed } & \text { Variable } \\\hline \text { Alpha Ave. } & \$ 5,000 & \$ 200 \text { perperson } \\\text { Beta Blvd. } & \$ 8,000 & \$ 150 \text { perperson }\end{array}$$ If it is estimated that 30 persons will be living in this new chapter house, what would be the Skulls' annual cost savings by selecting the less costly location, rather than the more costly?

• A) $0
• B) $1,500
• C) $200
• D) $150
• E) $350

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Definitions:

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A former United States military analyst who, during the Vietnam War, released the Pentagon Papers, a top-secret Department of Defense study of U.S. political and military involvement in Vietnam, to the public.

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