Discussion:
Q: 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. Explain and please provide the excel formulas.
a) Determine the break-even point for each range.
b) If estimated demand is 90 to 120 customers per day, how many machines should be purchased?