Zoe Garcia is the manager of a small office support business that supplies copying, binding, and other services for local companies. Zoe must replace a worn-out copy machine that is used for black and white copying. Two machines are being considered, and each of these has a monthly lease cost plus a cost for each page that is copied. Machine 1 has a monthly lease cost of $600, and there is a cost of $0.010 per page copied. Machine 2 has a monthly lease cost of $400, and there is a cost of $0.015 per page copied. Customers are charged $0.05 per page for copies.
- What is the break-even point for each machine?
- If Zoe expects to make 10,000 copies per month, what would be the cost for each machine?
- If Zoe expects to make 30,000 copies per month, what would be the cost for each machine?
- At what volume (the number of copies) would the two machines have the same monthly cost? What would the total revenue for this number of copies be?