Beta has an opportunity to automate some of the billing process so that customers can use...

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Finance

Beta has an opportunity to automate some of the billing processso that customers can use a direct account deduction. Moving to anautomated billing process is voluntary for customers and Beta doesnot know what percentage will move.
There are currently 100,000 customers. The cost of the billingprocess as currently constituted is $40,000 of annual fixed costand $0.20 per bill. Automating the billing will result in a totalof $50,000 of annual fixed cost, which is to say that some of theprior fixed cost will continue and Beta will need new software andequipment. Variable costs for any automated bill will drop to $0.04per bill.
How many customers must switch to the automated billing processto break even with this opportunity?

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Beta has an opportunity to automate some of the billing processso that customers can use a direct account deduction. Moving to anautomated billing process is voluntary for customers and Beta doesnot know what percentage will move.There are currently 100,000 customers. The cost of the billingprocess as currently constituted is $40,000 of annual fixed costand $0.20 per bill. Automating the billing will result in a totalof $50,000 of annual fixed cost, which is to say that some of theprior fixed cost will continue and Beta will need new software andequipment. Variable costs for any automated bill will drop to $0.04per bill.How many customers must switch to the automated billing processto break even with this opportunity?