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2. CopyFast Company, a specialist in printing, has established 500 convenience photo 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 CopyFast 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: 1500S, a small volume model; 1500M, a medium-volume model; and 1500L, a large-volume model The annual rental costs and the operating costs vary with the size of each machine The machine capacities and costs are as follows Photocopier Model 1500S 1500M 1500L 800,000 Annual capacity (copies) 100,000 350,000 Costs $ 7,000 $ 11,000 $19,000 0.02 0.03 Annual machine rental Direct material and direct labor cost 0.02 0.02 per copy Variable overhead costs per copy 0.12 0.07a. Calculate the volume level in copies where CopyFast Company would be indifferent to acquiring either the small-volume model laser copier, 1500s, or the medium-volume model laser copier, 1500M Volume level copies b. Present a decision rule that would enable management to select the most profitable machine. (Hint: For your calculations compare 150OS to 1500M and 1500M to 15OOL.) Anticipated Annual Volume 0-80,000 80,000-200,000 200,000 and higher Optimal Model Choice

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a)The conclusion is that Copyfast company would be indifferent to acquiring either 1500s or 1500m machine at an annual volume of 80000 copies. Coropany oould be indk ffeual o auuirirg cost fos both cau equal Thü a) follouOs t5 00 5- 500 M 05 χ クしb) Presentation of decision rule

We have Conopaud 1500 s to 1500っ.. 1500 50OL の 04-1 Decision Rul ADticipatid Annual Volume 30000- 2000oo 500 M 1500 L

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