Answer:
The total cost of operating a truck would be $18000 as calculated below.
Explanation:
The total costs of operating the truck is a combination of fixed costs of $5500 per year and variable of $0.50 per mile ,hence the total cost function is given as:
TC=5500+0.50X
Where represents the number of miles driven per year.
Since X=25000 miles
TC=$5500+($0.50*25000)
TC=$5500+$12500
TC=$18000
The understanding here is that wages paid to the two employees working with the truck is already embedded in the fixed costs of $5500 per year, otherwise that would been given as a distinct cost entirely.
