Question
The Station, a boutique cookie company, needs to make a production process for its new cinnamon malt ball cookies. To help accomplish this, the company
The Station, a boutique cookie company, needs to make a production process for its new cinnamon malt ball cookies. To help accomplish this, the company has put together some numbers for production costs (per dozen cookies for the variable costs).
Process Type | Fixed Costs | Labor Costs | Material Costs |
---|---|---|---|
Pre-Bake | $261 | $1.99 | $0.77 |
Easy Bake | $641 | $1.45 | $0.54 |
Speed Bake | $871 | $1.32 | $0.54 |
The Station estimates demand for the semester will be 765dozen cinnamon malt ball cookies. Due to the cookies' expected popularity the selling price will be $4.90 per dozen. 1, Based on the projected demand (volume) for the semester, which process type should they select?
Pre-Bake
Speed Bake
Easy Bake
2, Under this process typethe one selected in the previous questionwhat would be their profits for the semester? (Display your answer to the nearest whole number).
3, What would be the break-even point (in unit volume or demand) between the process option you selected aboveand the "Speed Bake" process option? (Display your answer to the nearest whole number).
4, For a unit volume (or demand level) that is EXACTLY equal to the UNROUNDEDbreak-even point (derived in the previous question), what would be the total cost?(Display your answer to the nearest whole number).
5, For a volume that is 4 units greater thanthe break-even point (derived in the previous two questions), which process option would be best?
Pre-Bake
Speed Bake
Easy Bake
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