Suzy's Temporary Employee (STE) business, located in a big city, can do an online criminal background check in-house for $2.78 per search with a fixed cost of $32,000. A third-party online security firm offered to do asimilar security search for $7.00 per person with an annual service contract with STE. If STE's forecast is 3,000 searches next year, should STE continue to do the search in-house or accept the third-party offer? Use theExcel template Break-Even determine the best decision. Round your answer for the breakeven quantity to the nearest whole number and round your answer for the amount of saving/loss to the nearest dollar.searchesBreakeven quantity:Since the demand forecast of 3,000 searches is-Select-than the breakeven quantity, STE -Select- + outsource the work. STE -Select- + $by outsourcing.

Answered: Excel template Break-Even to determine…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suzy's Temporary Employee (STE) business, located in a big city, can do an online criminal background check in-house for $2.78 per search with a fixed cost of $32,000. A third-party online security firm offered to do a
similar security search for $7.00 per person with an annual service contract with STE. If STE's forecast is 3,000 searches next year, should STE continue to do the search in-house or accept the third-party offer? Use the
Excel template Break-Even determine the best decision. Round your answer for the breakeven quantity to the nearest whole number and round your answer for the amount of saving/loss to the nearest dollar.
searches
Breakeven quantity:
Since the demand forecast of 3,000 searches is-Select-than the breakeven quantity, STE -Select- + outsource the work. STE -Select- + $
by outsourcing.

Expert Solution

Step 1

In order to calculate the point at which you will break even, a break-even analysis compares the costs of a new business, service, or product to the unit sale price. In other words, it indicates when you will have generated enough revenue from sales to fully recoup your costs.

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