What is the revenue at the break-even quantity

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Reference no: EM131902362

Question: 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 $40,000 and variable costs of $1.60 per bag. A more mechanized process will have fixed costs of $75,000 per month with variable costs of $1.00 per bag. They expect to sell the shredded lettuce for $2.50 per bag.

a) The break-even quantity in units for the manual process = 44444 bags (round your response to the nearest whole number).

b) The revenue for the manual process at the break-even quantity = $111110 (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) What is the revenue at the break-even quantity for the mechanized process Revenue____ dollars (round your response to two decimal places).

Reference no: EM131902362

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