Janelle Heinke, the owner of Ha\'Peppas!, is considering a new oven in which to

Question

Janelle Heinke, the owner of Ha'Peppas!, is considering a new oven in which to bake the firm's signature dish, vegetarian pizza. Oven type A can handle 2020 pizzas an hour. The fixed costs associated with oven A are $ 20 comma 000$20,000 and the variable costs are $ 2.00$2.00 per pizza. Oven B is larger and can handle 4040 pizzas an hour. The fixed costs associated with oven B are $ 30 comma 000$30,000 and the variable costs are $ 1.00$1.00 per pizza. The pizzas sell for $ 12.00$12.00 each. a) The break-even point in units for oven type A = nothing units (round your response to the nearest whole number). The break-even point in units for oven type B = nothing units (round your response to the nearest whole number). b) If Janelle is expecting that the pizza shop is going to be able to sell 10 comma 00010,000 pizzas, then she should select oven A B A or B (Equal Profit) . c) If Janelle is expecting that the pizza shop is going to be able to sell 13 comma 00013,000 pizzas, then she should select oven A B A or B (Equal Profit) . d) The volume at which Oven A and Oven B have the same cost (crossover point) and Janelle would be indifferent = nothing pizzas (round your response to the nearest whole number). Janelle Heinke, the owner of Ha'Peppas!, is considering a new oven in which to bake the firm's signature dish, vegetarian pizza. Oven type A can handle 2020 pizzas an hour. The fixed costs associated with oven A are $ 20 comma 000$20,000 and the variable costs are $ 2.00$2.00 per pizza. Oven B is larger and can handle 4040 pizzas an hour. The fixed costs associated with oven B are $ 30 comma 000$30,000 and the variable costs are $ 1.00$1.00 per pizza. The pizzas sell for $ 12.00$12.00 each. 2020 $ 20 comma 000$20,000 $ 2.00$2.00 4040 $ 30 comma 000$30,000 $ 1.00$1.00 $ 12.00$12.00 a) The break-even point in units for oven type A = nothing units (round your response to the nearest whole number). nothing The break-even point in units for oven type B = nothing units (round your response to the nearest whole number). nothing b) If Janelle is expecting that the pizza shop is going to be able to sell 10 comma 00010,000 pizzas, then she should select oven A B A or B (Equal Profit) . 10 comma 00010,000 A B A or B (Equal Profit) . A B A or B (Equal Profit) A B A or B (Equal Profit) A B A or B (Equal Profit) c) If Janelle is expecting that the pizza shop is going to be able to sell 13 comma 00013,000 pizzas, then she should select oven A B A or B (Equal Profit) . 13 comma 00013,000 A B A or B (Equal Profit) . A B A or B (Equal Profit) A B A or B (Equal Profit) A B A or B (Equal Profit) d) The volume at which Oven A and Oven B have the same cost (crossover point) and Janelle would be indifferent = nothing pizzas (round your response to the nearest whole number). nothing

Explanation / Answer

a)

BEP=FC/Pr-VC

Oven A=20000/12-2=2000 pizzas

Oven B=30000/12-1=2727.27=2728 pizzas

b)

Profit A=(12*10000)-(20000+2*10000)=120000-40000=80000

Profit B=(12*10000)-(30000+1*10000)=120000-40000=80000

A or B

c)

Profit A=(12*13000)-(20000+2*13000)=156000-46000=110000

Profit B=(12*13000)-(30000+1*13000)=156000-43000=113000

B

d)

30000-20000/2-1=10000

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