The owner of a motel is considering outsourcing the daily room cleanup to Duffy’s Maid Service. The manager rents an average of 50 rooms for each of 365 nights. The owner’s cost to clean a room is $12. The Duffy’s Maid Service quote is $18 per room plus a fixed yearly cost of $24,000 for sundry items such as uniforms with the motel’s room. The owner’s fixed cost for space, equipment, and supplies is $60,000 per year.

(a) What is the break-even quantity in terms of the total number of rooms to clean each year?

(b) Which option should be chosen and why?