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A company ships a particular product to a market located 1000 miles from the plant at a cost of $4 per mile. Normally it ships 500 units at a time. If the company can ship the units unassembled, it can ship 800 units in a truck. What is the line-haul cost per unit now?
Suggested Answer: B
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30 comments · newest first
MA
Madonna
6 months ago
I agree, $5 makes sense. More units, lower cost per unit!
AN
Angelyn
6 months ago
I feel like it's a straightforward calculation. Option B seems correct.
BO
Bong
6 months ago
So, that would be $5 per unit, right?
ED
Eden
6 months ago
If they ship 800 units, that's $4000 divided by 800.
YU
Yuonne
7 months ago
Yeah, shipping cost is key here. $4 per mile for 1000 miles is $4000.
MA
Maryrose
7 months ago
This question is tricky. I think I need to calculate the total cost first.
MA
Marguerita
7 months ago
Wait, how does unassembled shipping change the cost? Sounds off.
CO
Cortney
8 months ago
I think it's $5 per unit. Seems right to me.
KE
Kenneth
8 months ago
Shipping 800 units means lower cost per unit!
DO
Domonique
8 months ago
So if it's 1000 miles, that's $4000 total.
GE
Georgeanna
8 months ago
The shipping cost is $4 per mile.
DA
Dawne
8 months ago
Wait, is this a trick question? I'm going to go with B) $5 just to be safe.
MA
Marjory
8 months ago
Haha, I bet the company is hoping these unassembled units don't get lost in transit. Anyway, I'm going with C) $8.
SH
Shonda
9 months ago
C) $8 makes sense. Shipping more units in a single truck should reduce the cost per unit.
TI
Tiffiny
9 months ago
I’m leaning towards option C, but I need to double-check my calculations. I remember something about economies of scale from our last session.
DE
Devon
9 months ago
If I recall correctly, the cost per mile is fixed, so it should be straightforward to calculate the total cost for 800 units. But I'm a bit confused about how the unassembled aspect changes things.
RE
Ressie
9 months ago
I'm pretty confident I know the answer. If they can ship 800 units instead of 500, the cost per unit should be lower. The total distance is still 1000 miles, so the total cost is the same. But with 800 units, the cost per unit is $4 per mile * 1000 miles / 800 units = $5 per unit.
ME
Merri
9 months ago
Okay, I'm going to try to work this out step-by-step. The total distance is 1000 miles, and the normal shipment is 500 units. So the cost per unit for the normal shipment is $4 per mile * 1000 miles / 500 units = $8 per unit.
CE
Celeste
9 months ago
Hmm, I think I've got this. If the normal shipment is 500 units at $4 per mile, that's $2,000 per shipment. But if they can ship 800 units, the cost per unit should be lower.
MY
Myra
10 months ago
I think we need to find the total shipping cost first and then divide by the number of units shipped. It feels similar to a practice question we did on shipping costs.
CH
Cheryll
10 months ago
I think the answer is D) $10. Shipping unassembled units doesn't seem to reduce the cost per mile, so the total cost would be higher.
JU
Justine
10 months ago
I remember something about calculating costs per unit, but I'm not sure how to factor in the unassembled shipping.
MA
Mammie
10 months ago
The correct answer is C) $8. Shipping 800 units instead of 500 units reduces the line-haul cost per unit.
LE
Lelia
11 months ago
I'm a little confused. The question says the cost is $4 per mile, but it doesn't specify the total distance. Do we need to calculate the total cost first?
JA
Janine
11 months ago
Okay, let's think this through. If the company can ship 800 units unassembled, that's a lot more than the normal 500 units. So the cost per unit should go down.
LO
Lonna
5 months ago
So, $4000 divided by 800 units gives us $5 per unit!
RO
Royal
5 months ago
That's $4000 total, right?
SH
Shannon
6 months ago
Exactly! It's $4 per mile for 1000 miles.
CH
Chun
6 months ago
Right! The total cost for shipping is still the same.
GW
Gwenn
10 months ago
So, shipping 800 units instead of 500 should reduce the cost per unit.