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Tim Urban, owner/manager of Urban's Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to Duffy's Maid Service. Tim rents an average of 50 rooms for each of 365 nights (365 × 50 equals the total rooms rented for the year). Tim's cost to clean a room is $ 13.00. The Duffy's Maid Service quote is $ 19.00 per room plus a fixed cost of $25,000 for sundry items such as uniforms with the motel's name. Tim's annual fixed cost for space, equipment, and supplies is $60,000.
1. Based on the given information related to costs for each of the options, the crossover point for Tim = ? room nights
2. If the number of room nights is less than the crossover point, then"outsourcing/not outsourcing" is the best option available to Tim.
3. Based on the given room nights that Tim expects to rent (18,250), the best option is "outsourcing/not outsourcing"
Provide detailed answers with steps.
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