Gardens, Inc., prewashes, shreds, and distributes a variety of salad mixes in 2-pound bags. Doug Voss, Operations VP, is considering a new Hi-Speed shredderto replace the old machine, referred to in the shop as "Clunker." Hi-Speed will have a fixed cost of $85,000 per month and a variable cost of $1.25 per bag.Clunker has a fixed cost of only $44,000 per month, but a variable cost of $1.75. Selling price is $2.50 per bag.a) What is the crossover point in units (point of indifference) for the processes?b) What is the monthly cost if the company stays with Clunker and sells 60,000 bags per month?c) What is the monthly cost if the company changes to the Hi-Speed shredder and sells 60,000 bags per month?d) What is the monthly profit if the company stays with Clunker and sells 60,000 bags per month?ClunkerHi-SpeedFixed cost per monthVariable cost

(a) 82000(b) $149000(c) $160000(d) $1000Explanation:

Answered: Gardens, Inc., prewashes, shreds, and…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 6EB: Country Diner currently makes cookies for its boxed lunches. It uses 40,000 cookies annually in the...

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Reubens Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are: A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided, If Reuben accepts the offer, what will the effect on profit be?
SOLVE FOR F....Gardens, Inc., prewashes, shreds, and distributes a variety of salad mixes in 2-pound bags. Doug Voss, Operations VP, is considering a new Hi-Speed shredder to replace the old machine, referred to in the shop as "Clunker." Hi-Speed will have a fixed cost of $95,000 per month and a variable cost of $1.20 per bag. Clunker has a fixed cost of only $45,000 per month, but a variable cost of $2.00. Selling price is $2.80 per bag. d) What is the break-even point in units with the Hi-Speed shredder? e) What is the break-even point in dollars with the Hi-Speed shredder? f) What is the monthly profit if the company selects the Hi-Speed shredder and sells 70,000 bags per month?
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