What is the firm processing cost per envelope

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Copy World Company leases a machine that stuffs, seals, and stamps envelopes in one process. Copy World's lease agreement calls for a base charge of $4,000 per year plus $0.25 for every envelope over 1,000 the machine processes per month. Copy World leases their office space at a cost of $120,000 per year.

Problem 1: What is the firm's total annual cost for the lease if a total 2,500 envelopes are process each month?

Problem 2: What is the firm's total processing cost per envelope at a level of 2,500 envelopes processed each month?

Problem 3: What is the firm's processing cost per envelope if only 1,500 envelopes are processed each month?

Reference no: EM132971281

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