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Brindis Babysitting Center currently rents a 1200 sq foot facility for her 20-child facility. Her business has gotten five stars on Yelp, which has prompted
Brindis Babysitting Center currently rents a 1200 sq foot facility for her 20-child facility. Her business has gotten five stars on Yelp, which has prompted more applications. She has to make a decision between expanding her operations to an 1,800 sq foot facility or staying in the current facility. Shown is the cost data of the options:
Expand | Stay | |
Children served | 30 | 20 |
Annual rent | 1500 | 1000 |
Utilities | 500 | 300 |
Food and materials | 2100 | 1400 |
Direct labor | 6000 | 4000 |
Moving cost | 5000 |
What is the differential cost of the two alternatives: A) move to a larger facility or B) stay in current facility?
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