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Colony Landscape Maintenance has $20,000 in fixed costs. They had 2,000 customers and allocate these costs as $10 per customer. When their customers dropped to
Colony Landscape Maintenance has $20,000 in fixed costs. They had 2,000 customers and allocate these costs as $10 per customer. When their customers dropped to 1,500 the allocated costs went up per customer. Why is this not the best way to allocate fixed costs?
Compute the cost of extra capacity when customers fall from 2,000 to 1,500 customers.
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