A university currently has a recycling program for paper waste. The fixed cost of running this program is $10,000 per year. The variable cost for picking up and disposing of each ton of recyclable paper is $40. If the work is outsourced to a recycling company, the cost would be $65 per ton.
a. If the forecasted demand is 275 tons, what should the university do?
b. Find the break-even point.