Homework: HW2 Save Score: 3 of 9 pts 5 of 14 (14 complete) Hw Score: 57.95%, 57.

Question

Homework: HW2 Save Score: 3 of 9 pts 5 of 14 (14 complete) Hw Score: 57.95%, 57.95 of 100 pts Problem 7.7 Question Help 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 x50 equals the total rooms rented for the year). Tim's cost to clean a room is $12.50. The Duffy's Maid Service quote is $19.00 per room plus a fixed cost of $24,000 for sundry items such as uniforms with the motel's name. Tim's annual fixed cost for space, equipment, and supplies is $61,000. room nights (round your response to the nearest whole Based on the given information related to costs for each of the options, the crossover point for Tim- number)

Explanation / Answer

Let, X = number of rooms

For Tim’s in-house cleaning, cost function, CT = 12.5*X + 61000

For Duffy’s Maid service, Cost Function, CD = 19*X + 24000

To achieve a crossover point,

12.5*X + 61000 = 19*X + 24000

X = (61000 – 24000)/(19-12.5) = 5692.30 or 5692 room nights

Hence, the crossover point for Tim is 5692 room nights. Up to 5692 room nights, Duffy’s Maid service is less costly and beyond the level of 5692 room nights, Tim’s in-house cleaning is more economical.

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.