Processor of packaged shredded lettuce for institutional use

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Reference no: EM131725739

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 $36,000 and variable costs of $1.75 per bag. A more mechanized process will have fixed costs of $75,000per month with variable costs of $1.25 per bag. They expect to sell the shredded lettuce for $2.50 per bag.

?e) For monthly sales of 65,000 ?bags, for the option with manual? processing, A&Z Lettuce Products will have a profit of $_______

?f) For monthly sales of 65,000 bags, for the option with mechanized? processing, A&Z Lettuce Products will have a profit of ?$______

?g) The quantity at which Zan and Angela are going to be indifferent between the manual and mechanized process? = _____ bags.

?h) If the demand exceeds the point of? indifference, then Zan and Angela should prefer the option with **(either mechanized or manual)** processing.

Reference no: EM131725739

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