NewApp Software Production, from Problem 12, has decided to produce a new type of app. The app can be made with the current equipment in place. However, the company is considering investing in new software that would allow the developers to produce the app more quickly. The fixed cost would be raised to $650,000 per year, but the variable cost of labor per app would be reduced to $65,000 per app. The company still plans to sell the completed apps at $150,000each. Should NewApp produce the app with the new or current software described in Problem 12? Specify the volume of demand for which you would choose each process.

Data from Problem 12

NewApp Software Production is deciding whether to take on a new, large client, for whom additional hires will need to be made and another workspace will need to be rented. Estimates of the rents and facilities costs per year are $550,000, and the new developers the company must hire cost $75,000 per year, including benefits. One new developer must be hired for each app produced per year. The company estimates that five developers will need to be hired based on initial estimates of the scope of work, which entails five completed apps currently priced at $150,000 each.