Matthew Bailey, as manager of Designs by Bailey, is upgrading his CAD software. The high-performance (HP) software rents for $ 3 comma 000 per month per workstation. The standard-performance (SP) software rents for $ 1 comma 800 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 5 engineers and with the SP software he will need 6. This translates into a variable cost of $ 200 per drawing for the HP system and $ 250 per drawing for the SP system. If it is projected that the volume will be 90 drawings per month, then renting standard-performance high-performance software is the best option available to Matthew.

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