Revenue for the manual process at break-even quantity

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Reference no: EM132111336

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 fixed costs of $80,000 per month with variable costs of $1.25 per bag. They expect to sell the shredded lettuce for$2.75 per bag. ?

a) The? break-even quantity in units for the manual process? = bags ?(round your response to the nearest whole? number).

?b) The revenue for the manual process at the? break-even quantity? = ?$ ?(round your response to the nearest whole? number).

?c) The? break-even quantity in units for the mechanized process? = bags ?(round your response to the nearest whole? number). ?

d) The revenue for the mechanized process at the? break-even quantity? = ?$ ?(round your response to the nearest whole? number). ?

e) For monthly sales of 60,000 ?bags, for the option with manual? processing, A&Z Lettuce Products will have a profit of ?$ ??(round your response to the nearest whole number and include a minus sign if the profit is? negative).

?f) For monthly sales of60,000 ?bags, for the option with mechanized? processing, A&Z Lettuce Products will have a profit of ?$ ? ?(round your response to the nearest whole number and include a minus sign if the profit is? negative). ?

g) The quantity at which Zan and Angela are going to be indifferent between the manual and mechanized process? = ? bags ?(round your response to the nearest whole? number).

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

If the demand stays below the point of? indifference, then Zan and Angela should prefer the option with manual OR mechanized processing.

Reference no: EM132111336

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