Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The local convenience store makes personal pan pizzas. Currently, their process makes complete pizzas, fully cooked, for the customer. This process has a fixed
The local convenience store makes personal pan pizzas. Currently, their process makes complete pizzas, fully cooked, for the customer. This process has a fixed cost of $18,000, and a variable cost of $2.35 per pizza. The owner is considering a different process that can make pizzas in two ways: completely cooked (as before), or partially cooked and then flash frozen, for the customer to finish at home. This alternate process has a fixed cost of $27,000, but a lower variable cost (because much less energy is used in baking) of $1.30 per pizza. a. What is the crossover point between the existing process and the proposed process (round to the nearest whole unit)? b. If the owner expects to sell 8,000 pizzas, should he get the new oven?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started