A procedure at Mercy Hospital has fixed costs of $10,000 per year and variable costs of $50

Question:

A procedure at Mercy Hospital has fixed costs of $10,000 per year and variable costs of $50 per test. If the procedure is automated, its fixed cost will be $21,500 per year, but its variable cost will be only $10 per test. The number of tests that must be performed each year for the two operations to break even is closest to:

(a) 290

(b) 455

(d) Over 800