Matthew Bailey, as manager of Designs by Bailey,is upgrading his CAD software. The high-performance (HP)software rents for $3,000 per month per workstation. Thestandard-performance (SP) software rents for $2,000 per monthper workstation. The productivity figures that he has availablesuggest that the HP software is faster for his kind of design.Therefore, with the HP software he will need five engineers and with the SP software he will need six. This translates into a vari-able cost of $200 per drawing for the HP system and $240 per drawing for the SP system. At his projected volume of 80 draw-ings per month, which system should he rent?

Question

Matthew Bailey, as manager of Designs by Bailey,
is upgrading his CAD software. The high-performance (HP)
software rents for $3,000 per month per workstation. The
standard-performance (SP) software rents for $2,000 per month
per workstation. The productivity figures that he has available
suggest that the HP software is faster for his kind of design.
Therefore, with the HP software he will need five engineers and

with the SP software he will need six. This translates into a vari-
able cost of $200 per drawing for the HP system and $240 per

drawing for the SP system. At his projected volume of 80 draw-
ings per month, which system should he rent?