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 $7,000 plus $0.20 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 $12,000 and the variable costs of printing a photo will decline to $0.04 per photo.

Automatic versus Manual Processing Photo Station Com pany operates a printing service for customers With digital cameras. The current service, which requires employees to download photos from customer ca meras. has monthly operating costs of $7.000 plus $0.20 per photo printed. Management is evaluating the desirability ofacouiring a machine that Will allow customers to download and make prints without employee assistance. lithe machine is acquired, the monthly fixed costs Will increase to $i 2.000 and the variable costs of printing a photo will decline to $0.04 per photo. [3) Determine the total costs of printing 20,000 and 50,000 photos per month. zoom 5 5 some 5 s [til Determine the monthly volume at which the proposed process becomes preferable to (cost less than) the current process. units