California Gardens, Inc., prewashes, shreds, and distributes a variety of salad mixes in 2-pound bags. Doug Voss,

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California​ Gardens, Inc.,​ prewashes, shreds, and distributes a variety of salad mixes in​ 2-pound bags. Doug​ Voss, Operations​ VP, is considering a new​ Hi-Speed shredder to replace the old​machine, referred to in the shop as​ "Clunker." Hi-Speed will have a fixed cost of $85,000 per month and a variable cost of ​$1.25 per bag. Clunker has a fixed cost of only ​$44,000 per​ month, but a variable cost of​ $1.75. Selling price is​ $2.50 per bag.
(a) What is the crossover point in units​ (point of​ indifference) for the​ processes?
The crossover point is XX units. ​(Round your response to the nearest whole​ number.)
(​b) What is the monthly profit or loss if the company changes to the​ Hi-Speed shredder and sells 60,000 bags per​ month?
The monthly profit or loss if the company changes to the​ Hi-Speed shredder and sells 60,000 bags per month is ​$ XX. ​(Round your response to the nearest dollar and include a minus sign if​ necessary.)
(​c) What is the monthly profit or loss if the company stays with Clunker and sells 60,000 bags per​ month?
The monthly profit or loss if the company stays with Clunker and sells 60,000 bags per month is ​$ XX.
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Business Statistics

ISBN: 9780321925831

3rd Edition

Authors: Norean Sharpe, Richard Veaux, Paul Velleman

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