Question

Cost Assignment, Direct Costs

Harry Whipple, owner of an inkjet printer, has agreed to allow Mary and Natalie, two friends who are pursuing master's degrees, to print several papers for their graduate courses. However, he has imposed two conditions. First, they must supply their own paper. Second, they must pay Harry a fair amount for the usage of the ink cartridge. Harry's printer takes two types of cartridges, a black one and a color one that contains the inks necessary to print in color. Black replacement cartridges cost $25.50 each and print approximately 850 pages. The color cartridge replacement cost $31 and prints approximately 310 color pages. One ream of paper costs $2.50 and contains 500 sheets. Mary's printing requirements are for 500 pages, while Natalie's are for 1,000 pages.

Required:

1. Assuming that both women write papers using text only (i.e., black ink), what is the total amount owed to Harry by Mary? By Natalie? For interim calculations, round cost per page to two decimal places.

Total owed to Harry by Mary	$
Total owed to Harry by Natalie	$

2. What is the total cost of printing (ink and paper) for Mary? For Natalie? For interim calculations, round cost per sheet for paper to three decimal places. Round your final answers to two decimal places, if required.

Total cost for Mary	$
Total cost for Natalie	$

3. Now suppose that Natalie illustrates her writing with many large colorful pie charts and pictures and that about 20% of her total printing is primarily color. Mary uses no color illustrations. What is the total amount owed to Harry by Natalie? For interim calculations, round cost per sheet for paper to three decimal places & cost per page for color ink to two decimal places.
$

What is the total cost of printing (ink and paper) for Natalie?
$

Answer 1