Q. Susan Meyer, owner/manager of Meyers Motor Court in Key West, is considering outsourcing the daily room cleanup for her motel to Duffys Maid Service. Susan rents an average of 50 rooms for each of 365 nights (365 50 equals the total rooms rented
for the year). Susan's cost to clean a room is $12.50. The Duffys Maid Service quote is $18.50 per room plus a fixed cost of $25,000 for sundry items such as uniforms with the motels name. Susan's annual fixed cost for space, equipment and supplies is $61,000.
Do you know the break-even # of rooms where it would be just as beneficial for Susan Meyer to clean the rooms as it would be to pay the Maid service??