Janelle Heinke, the owner of Ha'Peppas!, is consideringa new oven in which to bake the firm's signature dish, vegetarianpizza. Oven type A can handle 20 pizzas an hour. The fixedcosts associated with oven A are $20,000 and the variable costsare $2.00 per pizza. Oven B is larger and can handle 40 pizzas anhour. The fixed costs associated with oven B are $30,000 and thevariable costs areS 1.25 per pizza. The pizzas sell for S 14 each.a) What is the break-even point for each oven?b) If the owner expects to sell9,000 pizzas, which oven should shepurchase?
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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 20 pizzas an hour. The fixed costs associated with oven A are $20,000 and the variable costs are $2.00 per pizza. Oven B is larger and can handle 40 pizzas an hour. The fixed costs associated with oven B are $30,000 and the variable costs areS 1.25 per pizza. The pizzas sell for S 14 each. a) What is the break-even point for each oven? b) If the owner expects to sell9,000 pizzas, which oven should she purchase? |
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- Janelle Heinke, the owners of Ha'Peppas, is consid-ering a new oven in which to bake the firm's signature dish, vegetarian pizza. Oven type A can handle 20 pizzas an hour. The fixed costs associated with oven A are $20,000 and the vari-able costs are $2.00 per pizza. Oven B is larger and can handle 40 pizzas an hour. The fixed costs associated with oven B are $30,000 and the variable costs are $1.25 per pizza. The pizzas sell for $14 each. a) What is the break-even point for each oven? b) If the owner expects to sell 9,000 pizzas, which oven should she purchase? c)If the owner expects to sell 12,000 pizzas, which oven should she purchase? d) At what volume should Janelle switch ovens?A biotech firm is considering abandoning its old plant, built 23 years ago, andconstructing a new facility that has 50% more square footage. The original cost of the old facility was $300,000, and its capacity in terms of standardizedproduction units is 250,000 units per year. The capacity of the new laboratoryis to be 400,000 units per year. During the past 23 years, costs of laboratoryconstruction have risen by an average of 5% per year. If the cost-capacity factor, based on square footage, is 0.80, what is the estimated cost of the newlaboratory?Differentiate between design capacity and capacity utilization. Briefly describe three capacity expansion strategies. An airline company must plan its fleet capacity and long-term schedule of aircraft usage. For one flight segment, the average number of customers per day is 70, which represents a 65 percentage utilization rate of the equipment assigned to the flight segment. If demand is expected to increase to 84 customers for this flight segment in three years, and management requires a capacity cushion of 25 percent, calculate the following:- the planned capacity requirement. the maximum number of customers the flight segment can accommodate. the efficiency rate of the flight segment assuming that the current effective capacity of the flight segment is 93 customers.
- Collins Little Company has a staff of 4 employees, each working 8 hours per day at a rate of$20/hour. Their overhead expenses are $200/day. Collins processes and closes on 12 titleseach day. They are considering purchasing a computerized title search system that will allowthe processing of 20 titles per day. With the new system, they could cut their staff to 2employees working the same hours at the same pay, but their overhead expenses woulddouble to $400 per day.a. Compute the labor productivity with the old system (in titles / worker hour).b. Compute the labor productivity with the new system (in titles / worker hour).c. Compute the multifactor productivity with the old system (in titles / dollar).d. Compute the multifactor productivity with the new system (in titles / dollar)A small firm intends to increase the capacity of a bottleneck operation for producing a product by adding a new machine. Two alternatives, A and B, have been identified and the associated costs and revenues have been estimated. Annual fixed costs would be $30000 for A and $25,000 for B; variable costs per unit would be $10 for A and $12 for B; and the revenue per unit would be $25. i. Find the total cost functions for alternatives A and B, and the revenue function ii. Draw both the total cost functions and the revenue function in the same figure. iii. Find the break-even point for the alternatives A and B and show it in the figure iv. Is there any volume of output at which both the alternatives yield the same profit? If so, show it in the figure. If not, identify the volume of output at which the alternatives are indifferentKristin Helmud is the general manager of Highland Inn, a local mid-priced hotel with 100 rooms. Her job objectives include providing resourceful and friendly service to the hotel’s guests, maintaining an 80% occupancy rate, improving the average rate received per room to $88 from the current $85, achieving a savings of 5% on all hotel costs, and reducing energy use by 10% by carefully managing the use of heating and air conditioning in unused rooms and by carefully managing the onsite laundry facility, among other means. The hotel’s owner, a partnership of seven people who own several hotels in the region, wants to structure Kristin’s future compensation to objectively reward her for achieving these goals. In the past, she has been paid an annual salary of $72,000 with no incentive pay. The incentive plan the partners developed has each of the goals weighted as follows: Measure Percent of Total Responsibility Occupancy rate (also reflects guest service quality) 20%…
- College chums Hannah Baltzan and Tyler Phillips are working on opening a third espressodrive-through stand in Highlands Ranch, Colorado, called Brewed Awakening. Their originaldrive-through stand, Jitters, and their second espresso stand, Bean Scene, have done wellin their current locations in Englewood, Colorado, five miles away. Since Hannah and Tylerwant to start with low overhead, they need assistance analyzing the data from the past yearon the different types of coffee and the amounts that they sold from both stands. Hannah andTyler would like a recommendation of the four top sellers to start offering when BrewedAwakening opens. They have provided you with the data file T3_JittersCoffee_Data.xls foryou to perform the analysis that will support your recommendation. Key Jitters = North Bean Scene = South Product Month Store Revenue Regular January North 4320 Regular February North 4500 Regular March North 3528 Regular April North 3960…A manager must decide how many machines of a certain type to purchase. Each machine can process 100 customers per day. One machine will result in a fixed cost of $2,000 per day, while two machines will result in a fixed cost of $3,800 per day. Variable costs will be $20 per customer, and revenue will be $45 per customer.a. Determine the break-even point for each range.b. If estimated demand is 90 to 120 customers per day, how many machines should be purchased?The design capacity for car workshop in a company is 110 cars per week. The effective capacity is 95 cars per week and the actual output for this week was 88 cars. If the utilization for next week is expected to be 70%, then the expected output is (...................) cars per week. Answer:
- ABC Inc is considering the possibility of building an additional factory that would produce a new addition to its product line. The company is currently considering 2 options. The first is a small facility that could build be built at a cost of $6million. If demand for the new product is low, the company expects to receive $10million in discounted revenues(present value of future revenues) with the small building. On the other hand, if demand is high, it expects $12million in discounted revenues using the small building.The second option is to build a large facility at a cost of $9million. If the demand were to low, the company would expect $10million in discounted revenues with the large building. If demand is high, the company estimates that the discounted revenues would be $14million. In either case, the probability of demand being high is 0.40, and the probability of it being low is 0.60. Not constructing a new facility would result in no additional revenue being generated…Stapleton Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed cost for proposal A is $65,000, and for proposal B, $34,000. The variable cost for A is $10, and for B, $14. The revenue generated by each unit is $18.a) What is the crossover point in units for the two o ptions?b) At an expected volume of8,300 units, which alternative shouldbe chosen?Expando, Inc. is considering the possibility of building an additional factory that would produce a new addition to its product line. The company is currently considering two options. The first is a small facility that it could build at a cost of $9 million. If demand for new products is low, the company expects to receive $11 million in discounted revenues (present value of future revenues) with the small facility. On the other hand, if demand is high, it expects $12 million in discounted revenues using the small facility. The second option is to build a large factory at a cost of $12 million. Were demand to be low, the company would expect $13 million in discounted revenues with the large plant. If demand is high, the company estimates that the discounted revenues would be $18 million. In either case, the probability of demand being high is 0.50, and the probability of it being low is 0.50. Not constructing a new factory would result in no additional revenue being generated because…