Standard-performance and high performance software rents

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Reference no: EM13901311

Harold Potter, a manager of Designs by Potter, is upgrading his CAD software. The high performance (IBM) software rents for $3,000 per month per workstation. The standard-performance (HP) software rents for $2,000 per month per workstation. The productivity figures that he has available suggest that the IBM software is faster for his kind of design. Therefore, with the IBM software he will need five engineers and with the HP software he will need six. This translates into a variable cost of $200 per drawing for the IBM system and $240 per drawing for the HP system. At his projected volume of 80 drawings per month, which system should he rent?

A. HP software

B. IBM software

C. Can not be determined

D. Either software should be rented.

Reference no: EM13901311

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