An automated car wash called Jet Express outside a large Texas city on the beltway is deciding whether to build and install one dedicated vehicle wash line or have two parallel wash lines. There are no other cash washes at this intersection and there will be none because all the land is developed. The second line allows for some economies of scale in total cost.

The monthly fixed cost of one wash line is $15,000 per month or $180,000 per year. This includes the mortgage payment, taxes on the building, and wash equipment. The variable cost for this single line is

$16 per vehicle. The fixed cost for two wash lines is $26,000 per month or $312,000 per year, and the variable cost to operate two lines is $13 per vehicle because some wash crews can work both lines.

The price of the average interior and exterior car wash is $25. Use the Excel template Break-Even in MindTap to answer the following questions:

a. What is the break-even quantity for one and two automated wash line?

b. Annual forecasts of demand for this site ranges from 20,000 to 40,000 per year. What would you recommend?