Question

Help in section B please

Southern Environmenta I Consulting (SEC), Inc. designs plans and specifications for asbestos abatement (removal) projects in public, private, and government buildings Currently, SEC must conduct an air test before allowing the occupancy i a udiding The ony pcos in thie evstom are the oosts of shinpina the air-test samples to the subcontractor e and the labor involved in shipping the samples. With the growth of the business consider either continuing subcontract the TEM analysis to outside companies developing its own TEM MARR SEC mus laboratory. Because of the passage of the Asbestos Hazard known Emergency Response Act (AHERA) by the U.S. Congress, SEC expects about 1,000 air-sample tests per year over eight years. The firm's to be 15 %. EEB Click the icon to view the description of alternatives Click the icon to view the interes t factors r discrete compounding when MARR 15% per year . (a) Determine the cost of an air-sample test by the TEM laboratory (in-house). The unit cost $ 188.62 (Round t the nearest cent.) (b) What is the required number of air samples per year to make the two options equivalent? The break-even number of air samples is (Round to the nearest whole number.) esigns plans estos has be ntractor's fe her continu ongress, SE ent buildings. Cu Xlectron microsc ontractor and th y. Because of t to be 15%. More Info Subcontract option. The client is charged $400 per sample, which is $100 above the subcontracting fee of $300. Labor expenses are $1,500 per year, and shipping expenses are estimated to be $0.50 per sample. TEM purchase option. The purchase and installation cost for the TEM is $415,000. The equipment would last for eight years, at which time it would have no salvage value. The design and renovation cost is estimated to be $9,500 and it is paid only once along with the installation cost. The client is charged $300 per sample based on the current market price. One full-time manager and two part-time technicians are needed to operate the laboratory. Their combined annual salaries will be $50,000. Material required to operate the lab includes carbon rods copper grids, filter equipm estimated at $6,000 per year. Utility costs, operating and maintenance costs, and the indirect labor needed to maintain the lab are estimated at $18,000 per year. atives. iscrete com TEM labora ent.) year to ma and acetone. The costs of these materials are und to the n The extra income-tax expenses would be $20,000. Print Done elick Check Clear All (?

Answer 1

b. Break Even Number

Total Cost of 1000 Samples = 1000 *188.62 = $188620

Lets says X is break even number

Sale Price under Sub Contract - (Sub Contract Fee + Sample Fee + (Labor Expenses/X)) = Sale Price under TEM - (Total Cost / X)

400 - (300 + 0.50 + (1500/X)) = 300 - (188620 / X)

Solve for X

(1500/X) + 188620 / X = 200.55

200.55 * X = 190120

X = 948 Air Samples Break Even Samples