Janelle Heinke, the owner of Ha'Peppas!, is considering a new oven in which to bake the firm's signature dish, vegetarian pizza. Oven type A can handle 20 pizzas an hour. The fixed costs associated with oven A are $20,000 and the variable costs are $2.00 per pizza. Oven B is larger and can handle 40 pizzas an hour. The fixed costs associated with oven B are $30,000 and the variable costs are $1.25 per pizza. The pizzas sell for $14.00 each. a) The break-even point in units for oven type A = 1667 units (round your response to the nearest whole number). The break-even point in units for oven type B = units (round your response to the nearest whole number).
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- Janelle Heinke, the owner of Ha'Peppas!, is consideringa new oven in which to bake the firm's signature dish, vegetarianpizza. Oven type A can handle 20 pizzas an hour. The fixedcosts associated with oven A are $20,000 and the variable costsare $2.00 per pizza. Oven B is larger and can handle 40 pizzas anhour. The fixed costs associated with oven B are $30,000 and thevariable costs areS 1.25 per pizza. The pizzas sell for S 14 each.a) What is the break-even point for each oven?b) If the owner expects to sell9,000 pizzas, which oven should shepurchase?Janelle Heinke, the owners of Ha'Peppas, is consid-ering a new oven in which to bake the firm's signature dish, vegetarian pizza. Oven type A can handle 20 pizzas an hour. The fixed costs associated with oven A are $20,000 and the vari-able costs are $2.00 per pizza. Oven B is larger and can handle 40 pizzas an hour. The fixed costs associated with oven B are $30,000 and the variable costs are $1.25 per pizza. The pizzas sell for $14 each. a) What is the break-even point for each oven? b) If the owner expects to sell 9,000 pizzas, which oven should she purchase? c)If the owner expects to sell 12,000 pizzas, which oven should she purchase? d) At what volume should Janelle switch ovens?You are the operations manager for Louisiana Oysters, Inc. The company has designed new "Oyster shucking" knife that is expected to reduce risk of injury to the user. Your firm plans to begin production of these knives soon. Either of two machines, A or B could be used for in-house production. Machine A would have a fixed cost of $6000 and a variable cost of $5 per knife produced, and machine B would have a fixed cost of $9600 but a variable cost of $3 per knife. Each knife is expected to sell for $15. Determine the Range of annual “Volume of Business“[Q], for which each of the two alternative machines would be optimal i.e. best. Hint: Compute various break-even points for your evaluation
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