Question

Expenses at a boarding house are partly fixed and are partly varying on the number of boarders at the house. The average expense per boarder is Rs. 700 with 25 boarders. The average expense comes to Rs. 600 when the number of boarders is 50. What will the average cost per boarder when the number of boarders is 100?

• A. 550
• B. 560
• C. 540
• D. 570

Hint:

Use simultaneous equations to break down problems involving fixed and variable costs and solve for unknowns.

Answer 1

The Correct Option is C

Let the fixed cost be $F$ and the variable cost per boarder be $V$. From the given data, we have two equations: \[ \frac{F + 25V}{25} = 700 \quad \text{and} \quad \frac{F + 50V}{50} = 600 \] By solving these equations, we calculate the average cost per boarder when the number of boarders is 100, which comes out to be Rs. 540.