Reference no: EM132998980
Problem - At the present time a university goes to an outside supplier for colour printing at a cost of $0.30 per page. However, the university is investigating two possible technologies for colour printing on-campus.
(1) A colour photocopier would cost $480 per month, and there would be a variable cost of $0.24 per page.
(2) A web-offset printer would cost $3960 per month, but the variable cost would be only $0.08 per page.
(a) What is the break-even point (BEP) for the colour photocopier?
(b) What is the BEP for the web-offset printer?
(c) At 15,000 copies per month, what is the total cost for (i) the colour photocopier (ii) the web-offset printer?
(d) At 40,000 copies per month, what is the average cost per page for (i) the colour photocopier (ii) the web-offset printer?
(e) At what number of pages per month would both technologies cost the same?
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