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A university currently has a recycling program for paper waste. The fixed cost of running this program is $25,000 per year. The variable cost for picking up and disposing of each ton of recyclable paper is $40. If the work is outsourced to a recycling company, the cost would be $65 per ton. a. If the forecasted demand is 900 tons, what should the university do? Use the Break-Even Excel template in MindTap to find your answer. Round your answers to the nearest dollar. Total cost of doing the job in-house: $ Total cost of outsourcing the job: $ So the best decision for the university is to -Select- for a savings of $ b. Find the break-even point using the Excel Goal Seek tool. Round your answer to the nearest whole number. tons

A university currently has a recycling program for paper waste. The fixed cost of running this program is $25,000 per year. The variable cost for picking up and disposing of each ton of recyclable paper is $40. If the work is outsourced to a recycling company, the cost would be $65 per ton. a. If the forecasted demand is 900 tons, what should the university do? Use the Break-Even Excel template in MindTap to find your answer. Round your answers to the nearest dollar. Total cost of doing the job in-house: $ Total cost of outsourcing the job: $ So the best decision for the university is to -Select- for a savings of $ b. Find the break-even point using the Excel Goal Seek tool. Round your answer to the nearest whole number. tons

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Profitability Analysis Cost Revenue Quantity 10,000 Fixed cost $100,000.00 Unit cost $12.00 Unit revenue $20.00 Total Cost $220,000.00 Total Revenue Net Profit Profit or Loss Outsourcing Decision Produce In-House Outsource Quantity 12,000 Fixed cost 250,000.00 Unit cost $20.00 Fixed cost Unit cost $35.00 Technology Choice Decision Option A Option B Quantity 11,000 Fixed cost $200,000.00 Unit cost $18.60 Fixed cost $100,000.00 Unit cost $21.00 Total In-House Production Cost 190,000.00 $200,000.00 Total Outsourced Cost 120,000.00 -$20,000.00 Cost difference (In-House - Outsourced $70,000.00 Cost difference (Option A - Option B) Loss Economical Decision Outsource Economical Decision Total Cost Option A $404,600.00 Total Cost Option B $331,000.00 $73,600.00 Option B
Transcribed Image Text:Profitability Analysis Cost Revenue Quantity 10,000 Fixed cost $100,000.00 Unit cost $12.00 Unit revenue $20.00 Total Cost $220,000.00 Total Revenue Net Profit Profit or Loss Outsourcing Decision Produce In-House Outsource Quantity 12,000 Fixed cost 250,000.00 Unit cost $20.00 Fixed cost Unit cost $35.00 Technology Choice Decision Option A Option B Quantity 11,000 Fixed cost $200,000.00 Unit cost $18.60 Fixed cost $100,000.00 Unit cost $21.00 Total In-House Production Cost 190,000.00 $200,000.00 Total Outsourced Cost 120,000.00 -$20,000.00 Cost difference (In-House - Outsourced $70,000.00 Cost difference (Option A - Option B) Loss Economical Decision Outsource Economical Decision Total Cost Option A $404,600.00 Total Cost Option B $331,000.00 $73,600.00 Option B
A university currently has a recycling program for paper waste. The fixed cost of running this program is $25,000 per year. The variable cost for picking up and disposing of each ton of recyclable paper is $40. If the work is outsourced to a recycling company, the cost would be $65 per ton. a. If the forecasted demand is 900 tons, what should the university do? Use the Break-Even Excel template in MindTap to find your answer. Round your answers to the nearest dollar. Total cost of doing the job in-house: $ Total cost of outsourcing the job: $ So the best decision for the university is to -Select- for a savings of $ b. Find the break-even point using the Excel Goal Seek tool. Round your answer to the nearest whole number. tons
Transcribed Image Text:A university currently has a recycling program for paper waste. The fixed cost of running this program is $25,000 per year. The variable cost for picking up and disposing of each ton of recyclable paper is $40. If the work is outsourced to a recycling company, the cost would be $65 per ton. a. If the forecasted demand is 900 tons, what should the university do? Use the Break-Even Excel template in MindTap to find your answer. Round your answers to the nearest dollar. Total cost of doing the job in-house: $ Total cost of outsourcing the job: $ So the best decision for the university is to -Select- for a savings of $ b. Find the break-even point using the Excel Goal Seek tool. Round your answer to the nearest whole number. tons
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