Question
Dog Food Inc. cans dog food in its factory in Brooklyn, NY. Dog Food utilizes temporary employees and runs up to three shifts. Variable costs
Dog Food Inc. cans dog food in its factory in Brooklyn, NY. Dog Food utilizes temporary employees and runs up to three shifts. Variable costs for a case of dog food are $4 and a case sells for $10. The volume of cases of dog food manufactured varies based on the number of shifts that Dog Food run: one shift: 0-1000 cases; two shifts: 1,001 3,000 cases, and three shifts: 3,001 5,000 cases. Fixed costs are also based on the number of shifts: one shift $3,000; two shifts $5,700; three shifts $8,200
a. Calculate the break-even point in cases for each shift.
b. Assume Johnson Fish Company can sell all of the cases of Tuna that it produces. How many shifts should it run?
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