A company can ship LTL direct to customers in city A or use a public warehouse located in city B. It has determined the following data.

Cost per pound for shipping LTL to city A is $0.70 + $0.30 per mile.

Cost per pound for shipping TL to warehouse is $0.40 + $0.15 per mile.

Warehouse handling costs are $0.30 per pound.

Distances: Plant to city A = 115 miles

Plant to city B = 135 miles

From city B to city A = 30 miles

a. What is the total cost per pound to ship from the plant direct to customers in city A?

b. What is the total cost per pound to ship via the warehouse in city B?

c. In this problem, the cost per pound has a fixed and a variable component. Why?