Question

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 comma 000 and the variable costs are $ 2.50 per pizza. Oven B is larger and can handle 42 pizzas an hour. The fixed costs associated with oven B are  $ 35 comma 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​ =
nothing units ​(round your response to the nearest whole​ number).
The​ break-even point in units for oven type B​ =
nothing units ​(round your response to the nearest whole​ number).
​b) If Janelle is expecting that the pizza shop is going to be able to sell 8 comma 000 ​pizzas, then she should select oven  
▼
A or B (Equal Profit)
A
B
.
​c) If Janelle is expecting that the pizza shop is going to be able to sell 13 comma 000 ​pizzas, then she should select oven
▼
A or B (Equal Profit)
A
B
.
​d) The volume at which Oven A and Oven B have the same cost​ (crossover point) and Janelle would be indifferent​ =
nothing pizzas

Answer 1

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