Differential Analysis

Need homework help.  See case attached below. Please show working for each question.Thanks

Case Studies

se

;UlCeS lS a l
er is consid

er custo

rice shop locatga i
:ri ng the pu rcfase
er base in tfle ma

Ftdil’,:,’,t:]1-L::’

downtown Mlami.
of a nevy juicqr to
ket. Thb shod is
peting With jL{ice€tx

c:h

l-he
cuP’

ene g increa
lns s s lumb luice tl,lbt offer ustomerls a wiKle

r

tyo ialty j ices ar*ll mixes. e shop is oppn

The ost ffi the new achine i$ $S0,p00.day
ellin of th n{w j’;ice mixe will be S2.00 lper
ndt t per cup is $ 50.

Wha n$nber nf juices $er day tl’lat m be
sold to acllievehreak even?
Upon Yudher intt$tiglation, thq owner lqarns ather inVdsti
the neW machinle Acl uires sub$tantial mBinte anc€,
whichArill incredse tl1g variablq cost by $.50 p

LH#”$”-
wo’\o thi\rma{on affecl vour

VVliat otiler facto’rs s roul\tne owner conpider
,V{aring the final deci sion do purchase thd mac

r

3. efore
ine?

,AN
pitfprential Analysis Caqq,$tpdy.

Madeira Travel Services provides travel agents access to
sophisticated travel informati’oo dild analysis systems over
the Web. The company combines these tools with access to
benchmarking data, includingl e-mail and wireless
communiCations, so that travel agents can instantly evaluate
airline fares and hotel rates.

$8,050 monthly salary for
two information technology
s;taff members who work onll
c)n e-mail

Madeira Travel Services; Pres;ident Joey Madeira is happy
with the company’s growth. ‘fo better focus on client
service, Madeira is considering outsOurcing some functions.
CFO Tom Lee suggests that the company’s e-mail may be
the place to start. Madeira asks Lee to identify the costs
related to Madeira Travel Senrices’ in-house Microsoft
Exchange mail application, winich has 23A0 mailboxes. This
information is below
\/ariable Costs Per mailbox per month

$7
$1
$4

$9+,300 Per month
$16,L00 per month

E-mail license

Other variable costs
Frixed Costs

Reqqifed:
. Compute the total cost ;ler mailbox per month of

Madeira Travel Services” current e-mail function.
. Suppose that a leader provider of Internet-messaging

outsourcing services offt:rs to host Madeira e*mail
function for $9 per mailhox per month. If Madeira
agrees, it still would neetd virus protection, computer
hardware and one IT person. Should they accept the
offer?

. Suppose for an addition,ill $5 per mailbox per month,
the outsourcer would prrrvide virus protection,
quarantine, and content’management services, which
would eliminate Madeira’s need for IT person and virus
protection. Should they accept the additional services?

. Show all computations.