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E14-16. Automatic versus Manual Processing Bartell's, a Seattle area drug store, operates an in-store printing service for customers with digital cameras. The current service, which
E14-16. Automatic versus Manual Processing Bartell's, a Seattle area drug store, operates an in-store printing service for customers with digital cameras. The current service, which requires employees to download photos from customer cam- eras, has monthly operating costs of $5,500 plus $0.15 per photo printed. Management is evaluat- ing the desirability of acquiring a machine that will allow customers to download and make prints without employee assistance. If the machine is acquired, the monthly fixed costs will increase to $7,000 and the variable costs of printing a photo will decline to $0.05 per photo. REQUIRED a. Determine the total costs of printing 10,000 and 25,000 photos per month: 1. With the current employee-assisted process. 2. With the proposed customer self-service process. Determine the monthly volume at which the proposed process becomes preferable to (com less than) the current process. b
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