Tim Urban, owner/manager of Urban?s Motor Courtin Key West, is considering outsourcing the daily room cleanupfor his motel to Duffy?s Maid Service. Tim rents an average of50 rooms for each of 365 nights (365 ? 50 equals the total roomsrented for the year). Tim?s cost to clean a room is $12.50. TheDuffy?s Maid Service quote is $18.50 per room plus a fixed costof $25,000 for sundry items such as uniforms with the motel?sname. Tim?s annual fixed cost for space, equipment, and suppliesis $61,000. Which is the preferred process for Tim, and why?
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