Tim Urban, owner/manager of Urban's Motor Court inKey West, is considering outsourcing the daily room cleanupfor his motel to Duffy's Maid Service. Tim rents an averageof 50 rooms for each of 365 nights (365 × 50 equals the totalrooms rented for the year). Tim's cost to clean a room is
$12.50.
The Duffy's Maid Service quote is
$18.50
per room plus a fixed cost of
$26,000
for sundry items such as uniforms with the motel'sname. Tim's annual fixed cost for space, equipment, andsupplies is
$60,000.
Part 2
Based on the given information related to costs for each ofthe options, the crossover point for Tim =
enter your response here
room nights (round your response to the nearest whole
- Tim Urban Owner Manager Of Urban S Motor Court In Key West Is Considering Outsourcing The Daily Room Cleanup For Hi 1 (192.4 KiB) Viewed 24 times
Tim Urban, owner/manager of Urban's Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to Duffy's Maid Service. Tim rents an average of 50 rooms for each of 365 nights (365 × 50 equals the total rooms rented for the year). Tim's cost to clean a room is $12.50. The Duffy's Maid Service quote is $18.50 per room plus a fixed cost of $26,000 for sundry items such as uniforms with the motel's name. Tim's annual fixed cost for space, equipment, and supplies is $60,000. Based on the given information related to costs for each of the options, the crossover point for Tim = room nights (round your response to the nearest whole number).
Based on the given information related to costs for each of the options, the crossover point for Tim = 6,308 room nights (round your response to the nearest whole number). If the number of room nights is less than the crossover point, then outsourcing is the best option available to Tim. Based on the given room nights that Tim expects to rent (18,250), the best option is not outsourcing .