At the BlueFin Bank corporate headquarters, management was discussing the potential of outsourcing the processingof credit card transactions to DataEase, an international provider of banking operational services. Processing of thetransactions at BlueFin has been a costly element of the annual profit and loss statement and the continualinvestment in equipment to keep up to date has been draining capital reserves.Based upon initial study and negotiations, DataEase will charge $0.02 more per transaction than BlueFin's costper transaction, and DataEase will want $7 million per year to cover equipment and overhead costs associated withthe contract. BlueFin has yet to develop an estimate for the annual overhead and fixed costs associated withprocessing the transactions. These costs include supervision, administrative support, maintenance,equipment depreciation, and overhead.If BlueFin must process 23 million transactions per year, how high must those fixed costs be before it would pay touse DataEase?The fixed costs must be higher than $. (Enter your response as an integer.)

Given, Let X be variable cost Let Y be fixed cost of Blue fin TC = Fixed cost + Variable cost For…

Answered: At the BlueFin Bank corporate…

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

ChapterC: Cases

Section: Chapter Questions

Problem 1.8A

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