The Brickhouse Company is planning to lease a delivery van for its northern sales territory. The leasing company is willing to lease the van under three alternative plans:

Plan A—Brickhouse would pay $0.34 per mile and buy its own gas.

Plan B—Brickhouse would pay $320 per month plus $0.10 per mile and buy its own gas.

Plan C—Brickhouse would pay $960 per month, and the leasing company would pay for all gas.

The leasing company will pay for all repairs and maintenance, insurance, license fees, and so on. Gas should cost $0.06 per mile.

Transcribed Image Text:

Required: Using miles driven as the units of volume, do the following: (1) Write out the cost equation for the cost of operating the delivery van un- der each of the three plans. (2) Graph the three cost equations on the same graph (put cost on the vertical axis and miles driven per month on the horizontal axis). (3) At what mileage per month would the cost of Plan A equal the cost of Plan B? (4) At what mileage per month would the cost of Plan B equal the cost of Plan C? (5) Compute the cost, under each of the three plans, of driving 3,500 miles per month.