Everest Deluxe World Travel Has Decided to Advertise in the Sunday

question 110

Multiple Choice

Everest Deluxe World Travel has decided to advertise in the Sunday editions of two major newspapers in town. These advertisements are directed at three groups of potential customers. Each advertisement in newspaper I is seen by 70,000 group A customers, 40,000 group B customers, and 20,000 group C customers. Each advertisement in newspaper II is seen by 10,000 group A, 20,000 group B, and 40,000 group C customers. Each advertisement in newspaper I costs $800, and each advertisement in newspaper II costs $700. Everest would like their advertisements to be read by at least 2 million people from group A, 1.4 million people from group B, and 1 million people from group C. How many advertisements should Everest place in each newspaper to achieve its advertising goals at a minimum cost? What is the minimum cost?

• A) 25 in newspaper I; 20 in newspaper II; $33,000
• B) 28 in newspaper I; 12 in newspaper II; $33,000
• C) 30 in newspaper I; 10 in newspaper II; $31,000
• D) 26 in newspaper I; 18 in newspaper II; $32,000

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Definitions:

Variable Costs

Expenditures that change in direct correlation with production levels or sales figures.

Rent

Rent is the payment made by a tenant to a landlord for the use of a property, equipment, or other assets for a specified period.

Warehouse

A warehouse is a large storage building where goods are stored before they are distributed for sale or further processed.

Employer Pension Costs

Expenses incurred by employers to fund retirement benefit plans for their employees.