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Find the monthly number of the bag

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Question - A distributor of prewashed shredded lettuce is opening a new plant and considering whether to use a mechanized process or a manual process to prepare the product. The manual process will have a fixed cost of $43,400 per month and a variable cost of $1.80 per bag. The mechanized process would have a fixed cost of $84,600 per month and a variable cost of $1.30 per bag. The company expects to sell each bag of shredded lettuce for $2.50. After setting up the model of the given problem on this worksheet, answer the given questions.

Required -

a. Find the "BEP (break-even point)" as well as "BEP in $" for each process using only Excel GOAL SEEK.

b. Find the monthly number of the bag of shredded lettuce for both processes to realize $6,000 profit using  Excel GOAL SEEK tool.

c. Which process, mechanized or manual, do you think the distributer should choose if the expected monthly number of the bag of shredded lettuce is 80,000 units?

Reference no: EM133163064

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