2184 BUSQOM 1070 SEC1030 OPERATIONS MANAGEMENT Homework: HW-CH07s Score: 0 of 1

Question

2184 BUSQOM 1070 SEC1030 OPERATIONS MANAGEMENT Homework: HW-CH07s Score: 0 of 1 pt Problem S7.25 Megan Shearson | 3/18/18 7:11 PM Save 43 of 3 (0 complete) Hw Score: 0%, 0 of 3 pts Question Help * Zan Azlett and Angela Zesiger have joined forces to start A&Z; Lettuce Products, a processor of packaged shredded lettuce for institutional use. Zan has years of food processing experience, and Angela has extensive commercial food preparation experience. The process will consist of opening crates of lettuce and then sorting, washing, slicing. preserving, and finally packaging the prepared lettuce. Together, with help from vendors, they think they can adequately estimate demand, fixed costs, revenues, and variable cost per bag of lettuce. They think a largely manual process will have monthly fixed costs of $37,500 and variable costs of $1.60 per bag. A more mechanized process will have fxed costs of $72,000 per month with variable costs of $1.00 per bag. They expect to sell the shredded letuce for $3.00 per bag. a) The break-even quantity in units for the manual process bags (round your response to the nearest whole number).

Explanation / Answer

a) For the manual process,

Break even quantity = Fixed cost / (Selling price - Variable cost)

= 37500/(3.00-1.60)

= 37500/1.40

= 26785.71 or rounded to 26786 bags

So the break even quantity in units for the manual process is 26786 bags

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.