Family Farms delivers fresh produce to local restaurants. The company is planning to add a home delivery service. The company will use the company-owned delivery vehicles that are currently used to make early morning deliveries to restaurants (i.e., home deliveries will be in the afternoon and evening). The increase in deliveries would require additional gas, oil, and maintainance costs per month: the company estimates an additional $5,300. The company will allocate 50% of the existing $6,200 fixed delivery vehicle costs to the home delivery service. The home delivery service would require an additional $12,800 in labor costs per month. What is the differential delivery cost per month for expanding into the home delivery market?

Multiple Choice

• $12,800.

• $20,750.

• $18,100.

• $21,200.