Shulas Beefsteak Tomatoes, LLC, farms tomatoes on a large tract of land in southwest Dade County. Shulas has an opportunity to purchase an adjoining farm owned by Bill Belichick, an unsuccessful tomato farmer who is about to go out of business. VP of Operations, Dan Marino, is trying to decide if he should operate the new farm with traditional, labor-intensive growing and harvesting techniques that have high variable costs with low fixed costs, or invest in new, capital-intensive, advanced-technology equipment, which would result in very low labor costs but very high fixed costs. Budgeted production costs in the table below.

		Capital Intensive			Labor Intensive
Direct materials per bushel of tomatoes		$ 1.00			$ 1.00
Direct labor per bushel of tomatoes		$ 0.25			$ 6.00
Variable manufacturing overhead per bushel		$ 0.06			$ 1.25
Fixed manufacturing overhead per year		$ 4,500,000			$ 850,000
Selling price per bushel of tomatoes		$25.00			$25.00

Incremental selling costs are budgeted at $650,000 per year plus $0.25 per bushel sold.

1.1 What is the break even-even point in bushels for the capital-intensive method?

Answer ___________________

1.2 What is the break even-even point in bushels for the labor-intensive method?

Answer ___________________

1.3 Determine the number of bushels at which point Shulas Beefsteak Tomatoes would be indifferent between the two methods.