Determine the break even volumes for each option

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Lamb, stew is a fledgling catering firm that serves the meat and potato segment of the market. The Co- owners want to expand their successful operations to include a neighboring town . After investigating their options, they have narrowed their choices to two. One option is to have a capacity of 10 events per month. This would result in a cost of $1600 a month plus a cost of $250 per event. The other option would have a capacity of 20 events per month, a cost of $3200 a month, at a cost of 200 per event. The firm would charge $450 for each event.

A. Determine the break even volumes for each option.

B. What profit (or loss) would each option produce if monthly demand is 10 events ?

C. If monthly demand is 14 events, which option would yield the greater profit ?

Reference no: EM132083989

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