A manager must decide how many machines of a certain type to purchase. Each machine can process 100 customers per day. One machine will result in a fixed cost of $2,000 per day, while two machines will result in a fixed cost of $3,800 per day. Variable costs will be $20 per customer, and revenue will be $45 per customer.
a. Determine the break-even point for each range.
One machine
Two machines
b. If estimated demand is 90 to 120 customers per day, how many machines should be purchased?
A .One machine
B. Two machines