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I need help with this question-
I can get the number for the manual and collating but I think I am missing a portion of the equation that relates to the “60 percent” portion. Can you help?
Automatic versus Manual Processing
Mid-Town Copy Service processes 1,800,000 photocopies per month at its mid-town service center.
Approximately 60 percent of the photocopies require collating. Collating is currently performed by
high school and college students who are paid $9 per hour. Each student collates an average of
5,000 copies per hour. Management is contemplating the lease of an automatic collating machine
that has a monthly capacity of 5,000,000 photocopies, with lease and operating costs totaling
$1,056, plus $0.04 per 1,000 units collated.
(a) Determine the total costs of collating 500,000 and 1,300,000 per month:
1. With student help:
500,000- $
1,300,000- $
2. With the collating machine:
500,000- $ ????
1,300,000- $ ????
(b) Determine the monthly volume at which the automatic process becomes preferable to the
manual process.
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