Considering adding coin-operated dry cleaning machines

Reference no: EM131705038

Taylor' Swifty Cleaners is considering adding coin-operated dry cleaning machines. Taylor estimates that one hundred customers would use each machine each day. If she buys one machine, she will pay a daily fixed cost of $2,200 If she buys two machines, she will pay a daily fixed cost of $3,700. Each customer would incur a variable cost of $20, and for each customer, Taylor would receive $45 in revenue.

a. What is break-even point if Taylor buys 1 machine? If she buys 2 machines? (Round to the next whole number.).

b. Taylor has forecast daily demand to be between 90 and 120 customers. Should she purchase one machine or two?

Reference no: EM131705038

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