PS.55 Four Corners is an IBC company that sells delicious Navajo tacos in the Crossroads Food Court. Part of their success can be attributed to the freshly fried Indian bread that is used not only for the tacos, but also for dessert items. As demand grows the fry-bread process is becoming a bottleneck. Operations management for the company is looking at two different process options to replace the highly manual process currently being used. Option 1 (medium automation) would cost $190 to implement whereas Option 2 (high automation) would cost $450. With Option 1 the variable cost per fry bread produced would be $0.23. The variable cost for Option 2 would be $0.11 per fry bread. At what volume (demand) of fry breads is the cost for the two options the same? (Display your answer to two decimal places.) What is the total cost for either option at this break-even volume (answered in the last question)? (Display your answer to two decimal places.)
PS.55 Four Corners is an IBC company that sells delicious Navajo tacos in the Crossroads Food Court. Part of their success can be attributed to the freshly fried Indian bread that is used not only for the tacos, but also for dessert items. As demand grows the fry-bread process is becoming a bottleneck. Operations management for the company is looking at two different process options to replace the highly manual process currently being used. Option 1 (medium automation) would cost $190 to implement whereas Option 2 (high automation) would cost $450. With Option 1 the variable cost per fry bread produced would be $0.23. The variable cost for Option 2 would be $0.11 per fry bread.
At what volume (demand) of fry breads is the cost for the two options the same? (Display your answer to two decimal places.)
What is the total cost for either option at this break-even volume (answered in the last question)? (Display your answer to two decimal places.)
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