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Campus Dining Services at the University at Buffalo has started up an in-house bakery to supply bread to all three campuses. The bakery mills its

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Campus Dining Services at the University at Buffalo has started up an in-house bakery to supply bread to all three campuses. The bakery mills its own flour in a factory that operates for three shifts per day (i.e. 24 hours per day) and six days per week. The mill must increase its output to support the increasing bread demands for next year. They are considering expanding their operations so that the mill would operate 24 hours per day, seven days per week. Use the following information about mill operations to answer the following questions: Basic Flour making information: It takes 2.35 bushels of wheat to make one hundredweight of flour The mill sells flour to UB for $22.64 per hundredweight The mill purchases wheat for $8.35 per bushel Mill Operations information: Mill capacity is 6,000 hundredweight of flour per day Fixed and variable costs are shown in the table below For each scenario {current and expanded operations) determine the following: (a) The volume of flour (in hundredweight) that the mill must sell to UB to break even (b) The marginal contribution rates (c) Average total cost per hundredweight of flour (d) Net profit margin per hundredweight before taxes (e) Should the mill expand its operations to 7 days a week? Justify your answer by considering the profit difference in each scenario

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