Untouchable package service (ups) offers overnight package delivery to canadian business customers. ups has recently decided to expand its facilities to better satisfy current and projected demand. current volume totals 2 million packages per week at a price of $12 each, and average variable costs are constant at all output levels. fixed costs are $3 million per week, and profit contribution averages one-third of revenues on each delivery. after completion of the expansion project, fixed costs will double, but variable costs will decline by 25 percent.