Solar Entertainment is a prOVider of cable. internet. and onrdemand Video seryices Solar currently sends monthly bills to its customers Via the postal sen/ice Because of a concern for the enVironment and recent increases In postal rates. Solar management is considering offering an option to its customers for paperless billing in addition to saying printing. paper. and postal costs. paperless billing Will save energy and water (through reduced paper needs. reduced waste disposal. and reduced transportation needs) While Solar would like to sWitch to 'l00% paperless billing many of its customers are not comfortable With paperless billing or may not have Web access, so the paper billing option Will remain' regardless otwhether Solar adopts a paperless billing system or not g (Click the icon to view the cost information.) Leouirements Requirement'l. Calculate the variable cost per bill mailed underthe current paperrbased billing system. Using the high-low method the variable cost per bill mailed under the current paper-based billing system is $ (Round your answer to the nearest cent.) 3% Requirement 2. Assume that the company projects that itWill have a total of 740,000 bills to mail in the upcoming quarter it enough customers choose the paperless billing option so that 30% ot the mailings can be convened to paperless. how much would the company save from the paperless billing system (be sure to consider the cost of the paperless billing system)? The company would save i; from using the paperless billing system Requirement 3. What if only 20% of the mailings are converted to the paperless option (assume a total of 740000 bills)? Should the company still offer the paperless billing system? Explain your rationale (Enter any losses as a positive number.) it only 20% of the mailings are convened to the paperless option. the company V oerthe paperless billing system because the company V 3; from using the paperless billing system X Cost information The cost of the paperless billing system would be $153,000 per quarter with no variable costs since the costs of the system are the salaries of the clerks and the cost of leasing the computer system. The paperless billing system being proposed would be able to handle up to 840,000 bills per quarter. (More than 840,000 bills per quarter would require a different computer system and is outside the scope of the current situation at Solar ) Solar has gathered its cost data for the past year by quarter for paper, toner cartridges, printer maintenance costs, and postage costs for the billing department. The cost data are as follows: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total paper, toner, printer maintenance, and postage costs . . ... . $ 560,000 $ 575,000 $ 740,000 $ 590,000 Total number of bills mailed. . . . . . . . . . . 510,000 515,000 690,000 540,000 Print Done