Cost indifference point City Services must open a new sanitary disposal site, because the current site is nearly full. A major feature of the new disposal site will be a trash compaction facility. A number of options have been proposed, and the evaluation has been narrowed to two options. The two trash compaction systems are the Scruncher and the Cruncher. The latter (Cruncher) is a larger system that requires higher fixed costs, but is more efficient to operate. Cost data for the two alternatives are presented below:

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Scruncher Cruncher Fixed costs: Annual depreciation... $12,000 $30,000 Hydraulic maintenance contract 5,000 9,000 Insurance and miscellaneous maintenance 3,000 2,000 Variable costs per ton processed: Labor. $ .18 $ .06 Fuel... .05 Supplies and other variable costs .02 108 .03 .01 885