EBK OPERATIONS MANAGEMENT
11th Edition
ISBN: 8220103630726
Author: RENDER
Publisher: PEARSON
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Chapter 7.S, Problem 20P
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 S2.00 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?
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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?
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Chapter 7 Solutions
EBK OPERATIONS MANAGEMENT
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