Cyber Queen Services' manager must decide whether to hire a new employee or to outsource some of the web design work to Kai Yu, a freelance graphic designer. If she hires a new employee, she will pay $30 per design hour for the employee to work 500 hours and incur service overhead costs of $2 per design hour. If she outsources the work to Kai Yu, she will pay $34 per design hour for 500 hours of work. She will also redirect the use of a computer and server to generate $4,000 in additional revenue from web page maintenance work.
Should Cyber Queen Services hire a new designer or outsource the work to Kai Yu?