Requirement 2. For what range of sales levels will Blueline prefer (a) the fixed lease agreement and (b) the commission agreement? In order to determine the range of sales levels Blueline would prefer for each agreement, we must first calculate the indiference point. The indifference point = Now calculate the indifference point. (Round to the nearest whole number.) The indifference point is at units. Blueline would prefer the fixed lease agreement at The commission based agreement would be preferred at Requirement 3. Blueline estimates that the company is equally likely to sell 26,000,36,000,46,000,56,000, or 66,000 pages of print. Using informaton fro Requirements 1. What is the company's breakeven point under the current leasing agreement? What is it under the new commission-based agreement? 2. For what range of sales levels will Blueline prefer (a) the fixed lease agreement and (b) the commission agreement? 3. Blueline estimates that the company is equally likely to sell 26,000,36,000,46,000, 56,000 , or 66,000 pages of print. Using information from the original problem, prepare a table that shows the expected profit at each sales level under the fixed leasing agreement and under the commission-based agreement. What is the expected value of each agreement? Which agreement should Blueline choose? Blueline Printing Company currently leases its only copy machine for $1,000 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, Blueline would pay a commission for its printing at a rate of $10 for every 500 pages printed. The company currently charges $0.29 per page to its customers. The paper used in printing costs the company $0.09 per page and other varlable costs, including hourty labor, amount to $0.12 per page. Read the reguirements. Requirement 1. What is the company's breakeven point under the current leasing agreement? What is it under the now commission-based agreement? First, determine the formula used to calculate the breakeven point in units, then calculate the company's breakeven point under the current leasing agreement. (Enter a 0 for any zero balances.) = Breakeven number of units = What is it under the new commission-based agreement? (Enter a " 0 " for any zero balancos.) The company's breakeven point under the new commission-based agreement is units. Requirement 2. For what range of sales levels will Blueline prefer (o) the fixed lease agreement and (b) the commission agreement? Requirement 3. Blueline estimates that the company is equally likely to sell 26,000,36,000,46,000,56,000, or 66,000 pages of print Using information from the original problem, prepare a table that shows the expected profit at each sales level under the fixed leasing agreement and under the commission-based agreement. What is the expected value of each agreement? Which agreement should Blueline choose? Begin with the fixed leasing agreement. (Use parentheses or a minus sign for losses.)
