A Hospital currently prepares its own food. Information regarding the food service is as follows:

Meals per week: 5,800

Variable cost per meal: $4.60

Fixed cost: $9,200 per week

An outside kitchen resource proposes the following:

Rent a new oven for $13,000 per week

Savings with new oven: $2.90 per meal

New fixed costs for food preparation: $6,000 per week (previously $9,200 per week)

What is the break even point with the new oven?

Besides costs, what other factors should be considered when purchasing a new oven?

Do you recommend the purchase of the oven? Why or Why not?