Tim Urban, owner/manager of Urban’s Motor Court in Key West, is considering outsourcing the daily room clean up for his motel to Duffy’s Maid Service. Tim rents an average of 50 rooms for each of 365 nights (50 x 365 equals the total rooms rented for the year). Tim’s cost to clean a room is $13.00. The Duffy’s Maid Service quote is $19.00 per room plus a fixed cost of $26,000 for sundry items as uniforms with the motel’s name. Tim’s annual fixed cost for space, equipment, and supplies is $60,000.
a) Based on the given information related to costs for each of the options, the crossover point for Tim = _____ room nights (round response to nearest whole number).
b) If the number of room nights is less than the crossover point, then _____ is the best option to Tim.
c) Based on the given room nights that Tim expects to rest, the best option is to _____.