SBD Phone Company sells its waterproof phone case for $90 per unit. Fixed costs total $162,000, and variable costs are $36 per u
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Answer:
a) Oven A = 1,667; Oven B = 2,353 pizzas.
b) Oven A
c) Oven A
d) 13,334 pizzas
Explanation:
Since nothing was mentioned regarding her time availability, the capacity of each oven will not be taken into account.
The income equation for ovens A and B, respectively, are:
Where 'x' is the number of pizzas sold.
a) The break-even occurs when income is zero:
Rounding up to the next whole pizza, the break-even for oven A is 1,667 pizzas and for oven B it is 2,353 pizzas.
b) For x = 9,000:
Income is greater with oven A, so Janelle should use oven A.
c) For x = 12,000
Income is greater with oven A, so Janelle should use oven A.
d) She should switch ovens at the value for 'x' that causes B to be greater than A:
Rounding up to the next whole pizza, she should switch ovens at a volume of 13,334 pizzas.