Save & Exi Required information Case 2-60 Understanding Cost Concepts (LO 2-7, 2-8, 2-10) [The following information applies to the questions displayed below] You just started a summer internship with the successful management consulting firm of Kirk, Spock, and McCoy. Your first day on the job was a busy one, as the following problems were presented to you. Required: Supply the requested comments in each of the following independent situations Case 2-60 Part 1 1. FastQ Company, a specialist in printing, has established 500 convenience copying centers throughout the country. In order to upgrade its services, the company is considering three new models of laser copying machines for use in producing high-quality copies. These high-quality copies would be added to the growing list of products offered in the FastQ shops. The selling price to the customer for each laser copy would be the same, no matter which machine is installed in the shop. The three models of laser copying machines under consideration are 10245, a small-volume model; 1024M, a medium-volume model, and 1024G, a large-volume model with the rien of nach maching The machinn ransition and are falla The annual talent and the naarstinn 10 11 E of 11 Drou Next > Submit M M Gal NEO Native Saved Help Save & Exit Submit Required information O 1. Fast Company, a specialist in printing, has established 500 convenience copying centers throughout the country. In order to upgrade its services, the company is considering three new models of laser copying machines for use in producing high-quality copies. These high-quality copies would be added to the growing list of products offered in the Fast shops. The selling price to the customer for each laser copy would be the same, no matter which machine is installed in the shop. The three models of laser copying machines under consideration are 10245, a small-volume model, 1024M, a medium-volume model and 1024G, a large-volume model The annual rental costs and the operating costs vary with the size of each machine. The machine capacities and costs are as follows Copier Model 1024M 350,000 10245 100,000 Annual capacity (copies) 10240 800,000 Costs: Annual machine rental $6,000 $ 11,000 $ 19,000 0.02 Direct material and direct labor 0.02 0.12 0.02 0.07 Variable overhead costs 0.01 a Calculate the volume level in copies where FastQ Company would be indifferent to acquiring either the small-volume model laser copier, 1024S, or the medium-volume model laser copier, 1024M. b. The management of FastQ Company is able to estimate the number of copies to be sold at each establishment Present a decision rule that would enable FastQ Company to select the most profitable machine without having to make a separate cost calculation for each establishment. (Hint: To specify a decision rule, determine the volume at which FastQ would be indifferent between the small 10 11 of 11 Next > Required 1A Required 18 The management of FastQ Company is able to estimate the number of copies to be sold at each establishment. Present a decision rule that would enable FastQ Company to select the most profitable machine without having to make a separate cost calculation for each establishment. (Hint: To specify a decision rule, determine the volume at which FastQ would be indifferent between the small and medium copiers. Then determine the volume at which FastQ would be indifferent between the medium and large copiers.) Show less A Anticipated Annual Volume At least But not more than Optimal Model Choice 1