Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tim Urban, owner/manager of Urban's Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to Duffy's Maid Service.

image text in transcribedimage text in transcribed

Tim Urban, owner/manager of Urban's Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to Duffy's Maid Service. Tim rents an average of 50 rooms for each of 365 nights (365 x 50 equals the total rooms rented for the year). Tim's cost to clean room is $13.00. The Duffy's Maid Service quote is $18.50 per room plus a fixed cost of $25,000 for sundry items such as uniforms with the motel's name. Tim's annual fixed cost for space, equipment, and supplies is $61,000. Based on the given information related to costs for each of the options, the crossover point for Tim room nights (round your response to the nearest whole number). If the number of room nights is less than the crossover poin, then option available to Tim. Based on the given room nights that Tim expects to rent (18,250), 1 is the best not outsourcing outsourcing

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles of Cost Accounting

Authors: Edward J. Vanderbeck, Maria Mitchell

17th edition

9781305480520, 1305087402, 130548052X, 978-1305087408

More Books

Students also viewed these Accounting questions

Question

Why do bars offer free peanuts?

Answered: 1 week ago

Question

What are the consequences of global data communication? LO.1

Answered: 1 week ago