FastQ Company, a specialist in printing, has established 500 convenience copying centers throughout the country. In order to upgrade its services, the company is considering three new models of laser copying machines for use in producing high-quality copies. These high-quality copies would be added to the growing list of products offered in the FastQ shops. The selling price to the customer for each laser copy would be the same, no matter which machine is installed in the shop. The three models of laser copying machines under consideration are 1024S (a small-volume model), 1024M (a medium-volume model), and 1024G (a large-volume model). The annual rental costs and the variable operating costs vary with the size of the machine. The machine capacities and costs are shown below: Required:
1. Determine the volume level in copies at which FastQ Company would be indifferent between acquiring either the small-volume model (1024S) or the medium-volume model (1024M).
2. The management of FastQ Company is able to estimate the number of copies to be sold at each establishment. Present an analysis that would enable FastQ Company to select the most profitable machine without having to make a separate cost calculation for each establishment. (CMA Adapted)

Question

FastQ Company, a specialist in printing, has established 500 convenience copying centers throughout the country. In order to upgrade its services, the company is considering three new models of laser copying machines for use in producing high-quality copies. These high-quality copies would be added to the growing list of products offered in the FastQ shops. The selling price to the customer for each laser copy would be the same, no matter which machine is installed in the shop. The three models of laser copying machines under consideration are 1024S (a small-volume model), 1024M (a medium-volume model), and 1024G (a large-volume model). The annual rental costs and the variable operating costs vary with the size of the machine. The machine capacities and costs are shown below: Required:
1. Determine the volume level in copies at which FastQ Company would be indifferent between acquiring either the small-volume model (1024S) or the medium-volume model (1024M). 
2. The management of FastQ Company is able to estimate the number of copies to be sold at each establishment. Present an analysis that would enable FastQ Company to select the most profitable machine without having to make a separate cost calculation for each establishment. (CMA Adapted)

Quizplus · Accepted Answer

The Answer of FastQ Company, a specialist in printing, has established 500 convenience copying centers throughout the country. In order to upgrade its services, the company is considering three new models of laser copying machines for use in producing high-quality copies. These high-quality copies would be added to the growing list of products offered in the FastQ shops. The selling price to the customer for each laser copy would be the same, no matter which machine is installed in the shop. The three models of laser copying machines under consideration are 1024S (a small-volume model), 1024M (a medium-volume model), and 1024G (a large-volume model). The annual rental costs and the variable operating costs vary with the size of the machine. The machine capacities and costs are shown below: Required:
1. Determine the volume level in copies at which FastQ Company would be indifferent between acquiring either the small-volume model (1024S) or the medium-volume model (1024M). 
2. The management of FastQ Company is able to estimate the number of copies to be sold at each establishment. Present an analysis that would enable FastQ Company to select the most profitable machine without having to make a separate cost calculation for each establishment. (CMA Adapted)

FastQ Company, a Specialist in Printing, Has Established 500 Convenience