Global Car Rental offers three different car rental plans.
Plan 1: $49.95 per day, unlimited mileage
Plan 2: $0.50 per kilometre
Plan 3: $24.95 per day, plus $0.25 per kilometre
REQUIRED
A. Classify each plan as variable cost, fixed cost, or mixed cost.
B. What is the total cost under each plan if a customer rents a car for 4 days and drives 380 km? What is the average cost per kilometre under each plan?
C. A customer needs to rent a car for half of a day, and she is not sure the distance that she will drive. Which plan should she take, if she plans to drive (1) 50 km, (2) 100 km, and (3) 250 km?