Star Entertainment is a provider of cable, internet, and on$-$demand video services. Star currently sends monthly bills to its customers via the postal service. Because of a concern for the environment and recent increases in postal rates, Star management is considering offering an option to its customers for paperless billing. In addition to saving printing, paper, and postal costs, paperless billing will save energy and water $($through reduced paper needs, reduced waste disposal, and reduced transportation needs$).$ While Star would like to switch to $100\%$ 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 of whether Star adopts a paperless billing system or not.

View the cost information.

Read the requirements.

Requirement $1.$ Calculate the variable cost per bill mailed under the current paper$-$based billing system. $($Round your answer to the nearest cent.$)$

What is the variable cost per bill mailed using the high$-$low method?

Requirement $2.$ Assume that the company projects that it will have a total of $690,000$ bills to mail in the upcoming quarter. If enough customers choose the paperless billing option so that $25\%$ of the mailings can be converted to paperless, how much would the company save from the paperless billing system $($be sure to consider the cost of the paperless billing system$)?$

How much would the company save?

Cost information

The cost of the paperless billing system would be $$150,000$ 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 $900,000$ bills per quarter. $($More than $900,000$ bills per quarter would require a different computer system and is outside the scope of the current situation at Star.$)$ Star 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:

$\backslash$table$[[,$Quarter $1,$Quarter $2,$Quarter $3,$Quarter $4],[\backslash$table$[[$Total paper, toner, printer$],[$maintenance$,$ and postage costs$],[$$