Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In excel sheet please Zan Azlett and Angela Zesiger have joined forces to start A&Z Lettuce Products, a processor of packaged shredded lettuce for institutional

In excel sheet please

Zan Azlett and Angela Zesiger have joined forces to start A&Z Lettuce Products, a processor of packaged shredded lettuce for institutional use. Zan has years of food-processing experience, and Angela has extensive commercial food-preparation experience. The process will consist of opening crates of lettuce and then sorting, washing, slicing, preserving, and finally packaging the prepared lettuce. Together, with help from vendors, they think they can adequately estimate demand, fixed costs, revenues, and variable cost per 5-pound bag of lettuce. They think a largely manual process will have monthly fixed costs of $37,500 and variable costs of $1.75 per bag. A more mechanized process will have fixed costs of $75,000 per month with variable costs of $1.25 per 5-pound bag. They expect to sell the shredded lettuce for $2.50 per 5-pound bag.

a. What is the break-even quantity for the manual process?

b. What is the revenue at the break-even quantity for the manual process?

c. What is the break-even quantity for the mechanized process?

d. What is the revenue at the break-even quantity for the mechanized process?

e. What is the monthly profit or loss of the manual process if they expect to sell 60,000 bags of lettuce per month?

f. What is the monthly profit or loss of the mechanized process if they expect to sell 60,000 bags of lettuce per month?

g. Challenging question. At what quantity would Zan and Angela be indifferent to the process selected?

h. Two challenging sub-questions: (i) Over what range of demand would the manual process be preferred over the mechanized process? (ii) Over what range of demand would the mechanized process be preferred over the manual process? the mechanized process be preferred over the manual process?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial and Managerial Accounting the basis for business decisions

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

16th edition

978-0078111044

Students also viewed these Accounting questions

Question

When is the application deadline?

Answered: 1 week ago