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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Automatic versus Manual Processing
Photo Station Company operates a printing service for customers with digital cameras. The current service, which requires employees to download photos from customer cameras, has monthly operating costs of $6,000 plus $0.20 per photo printed. Management is evaluating the desirability of acquiring a machine that will allow customers to download and make prints without employee assistance. If the machine is acquired, the monthly fixed costs will increase to $10,000 and the variable costs of printing a photo will decline to $0.04 per photo.
(a) Determine the total costs of printing 20,000 and 50,000 photos per month.
| Units | Current Process | Proposed Process |
|---|---|---|
| 20,000 | $Answer | $Answer |
| 50,000 | $Answer | $Answer |
(b) Determine the monthly volume at which the proposed process becomes preferable to the current process.
Answer
units
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