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Q 1 . Carrefour wants to launch its brand of in - store - grown organic lettuce in small bags. The supermarket has two options

Q1. Carrefour wants to launch its brand of in-store-grown
organic lettuce in small bags. The supermarket has two options
for processing harvested lettuce: manual processing (say A) and
mechanized processing (say B). The manual process will incur a
monthly processing cost of $1500 and a variable cost of $2 per
bag, while the mechanized process will incur a monthly
processing cost of $1040 and a variable cost of $1.50 per bag.
Besides, the mechanized process needs a recyclable bag costing
$0.25? bag to Carrefour. The store expects to fix the price at $5
per bag, irrespective of the processes.
a) What is the breakeven volume for the manual process?
Also, find the breakeven point in dollars.
b) What is the breakeven volume for the mechanized
process? Also, find the breakeven point in dollars.
c). Which process will you use if you expect sales of 600
bags monthly? Also, provide the opportunity loss of profit
if the store does not determine the better method.
d) At what sales volume is the profit from the sales made
from the mechanized process more than the profit from the
sales made from the manual process by $710?
e) Find the bags of sales both processes such that the manual
method has 500 bags more than the mechanized method,
and the profit of the mechanized process is $790 less than
the manual process.
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