Automatic versus Manual Processing

Photo Station Company operates a printing service for customers with digital cameras. The current service, which requires employees to download photos from customer cameras, has monthly operating costs of $$9,000$ plus $$0\mathrm{.}20$ per photo printed. Management is evaluating the desirability of acquiring a machine that will allow customers to download and make prints without employee assistance. If the machine is acquired, the monthly fixed costs will increase to $$14,000$ and the variable costs of printing a photo will decline to $$0\mathrm{.}04$ per photo.

$($a$)$ Determine the total costs of printing $20,000$ and $50,000$ photos per month.

UnitsCurrent ProcessProposed Process $20,000$ Answer $1$ Answer $250,000$ Answer $3$ Answer $4$

$$

$($b$)$ Determine the monthly volume at which the proposed process becomes preferable to$($cost less than$)$ the current process.

Answer $5$ units