In problem 20, the production process for making pizzas that Bennys Big Slice Pizza uses is very
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In problem 20, the production process for making pizzas that Benny’s Big Slice Pizza uses is very labor intensive. Benny is considering a more automated process design that requires the purchase of additional equipment that will increase annual fixed costs by $4,000 annually, and reduce the variable cost to $3.84 per pizza. What is the approximate volume of pizza slices that will make Benny indifferent between the old and new processes? Should Benny use the old labor-intensive process or the process with new equipment?
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