Problem:
Susan Meyer, owner/manager of Meyer's Motor Court in Key West, is considering outsourcing the daily room cleanup for her motel to Duffy's Maid Service. Susan rents an average of 50 rooms for each of the 365 nights (365*50 equals the total rooms rented for the year). Susan's cost to clean a room is $12.50. The Duffy's Maid Service quote is $19 per room plus a fixed cost of $25,000 for sundry items such as uniforms with the motel's name. Susan's annual fixed cost for space equipment, and supplies is $60,000.
1) Based on the given information related to costs for each of the options, the break-even point for Susan = _____ room nights?
2) If the # of room nights is less than the Break Even Point shen should Susan outsource or not outsource?