Considering purchasing new dry-cleaning equipment

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Reference no: EM13857569

In order to improve her service, Molly is considering purchasing new dry-cleaning equipment, including a pressing machine that could substantially increase the speed at which she can dry-clean clothes and improve their appearance. The new machinery costs $16,200 installed and can clean 40 clothes items per hour (or 320 items per day). Molly estimates her variable costs to be $0.25 per item dry-cleaned, which will not change if she purchases the new equipment. Her current fixed costs are $1 ,700 per month. She charges customers $1 .1 0 per clothing item.

If Molly purchases the new equipment, how many additional items will she have to dry-clean each month to break even?

Reference no: EM13857569

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