Question
The manufacturing cost of an air-condioning unit is $544, and the full-replacement extended warranty costs $113. If the manufacturer sells 506,970 units with extended warranties and must replace 20% of them as a result, how much will the replacement costs be? (Note: Assume manufacturing costs and replacement costs are the same.)
a.
$55,158,336
b.
$11,457,522
c.
$2,129,274
d.
$66,717,252
a.
$55,158,336
b.
$11,457,522
c.
$2,129,274
d.
$66,717,252
Answers
GPT-4o mini
To determine the total replacement costs for the air-conditioning units, we first need to figure out how many units need to be replaced.
1. **Calculate the number of units that need replacement**:
- Total units sold = 506,970
- Percentage needing replacement = 20%
- Number of units to be replaced = 20% of 506,970
\[
\text{Number of units to be replaced} = 0.20 \times 506,970 = 101,394
\]
2. **Determine the replacement cost**:
- The manufacturing cost (which is also the replacement cost) of each unit = $544
- Total replacement costs = Number of units to be replaced × Cost per unit
\[
\text{Total replacement costs} = 101,394 \times 544 = 55,158,336
\]
The total replacement costs will be **$55,158,336**.
Thus, the correct answer is **a. $55,158,336**.
1. **Calculate the number of units that need replacement**:
- Total units sold = 506,970
- Percentage needing replacement = 20%
- Number of units to be replaced = 20% of 506,970
\[
\text{Number of units to be replaced} = 0.20 \times 506,970 = 101,394
\]
2. **Determine the replacement cost**:
- The manufacturing cost (which is also the replacement cost) of each unit = $544
- Total replacement costs = Number of units to be replaced × Cost per unit
\[
\text{Total replacement costs} = 101,394 \times 544 = 55,158,336
\]
The total replacement costs will be **$55,158,336**.
Thus, the correct answer is **a. $55,158,336**.