EBK OPERATIONS MGMT.
12th Edition
ISBN: 9780134163567
Author: HEIZER
Publisher: PEARSON
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Textbook Question
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?
A real estate agent is considering changing her cell phone plan. There are three plans to choosefrom, all of which involve a monthly service charge of $20. Plan A has a cost of $.45 a minute fordaytime calls and $.20 a minute for evening calls. Plan B has a charge of $.55 a minute for daytime calls and $.15 a minute for evening calls. Plan C has a flat rate of $80 with 200 minutes ofcalls allowed per month and a charge of $.40 per minute beyond that, day or evening.a. Determine the total charge under each plan for this case: 120 minutes of day calls and 40 minutes of evening calls in a month.
8. 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
$3.00
per pizza. Oven B is larger and can handle
40
pizzas an hour. The fixed costs associated with oven B are
$32,500
and the variable costs are
$1.50
per pizza. The pizzas sell for
$15.00
each.
Part 2
a) The break-even point in units for oven type A = _______units (round your response to the nearest whole number).
b) What is the break-even point for each oven?
c) If the owner expects to sell 9,000 pizzas, which oven should she purchase?
d) If the owner expects to sell 12,000 pizzas, which oven should she purchase?
e) At what volume should Janelle switch ovens?
Chapter 7 Solutions
EBK OPERATIONS MGMT.
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