Analyze Costs for Decision Alternatives: Blinko Copies is a chain of copy centers offering general duplication services near major universities. Decisions about what equipment to use are made by central management. Blinko's management is currently evaluating three different types of machines. Operating and cost data for these machines are as follows:

Required:

a. Assuming each of the three machines could be used interchangeably at any Blinko outlet, what types of cost information would be relevant for this decision?

b. If a machine operates for 200.000 minutes per year, what is the average total unit cost for each type of machine?

Transcribed Image Text:

Capacity (sheets per minute) Annual fixed costs* Variable cost per sheet Machine life Cost of machine Salvage value IX360 108 $5,620 Model Number JX380 112 $6,020 .0265 .023 KX400 120 $7,100 .022 7 years $16.250 7 years $18,870 2,400 3.800 8 years $24,425 4,250