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Question 1 Janelle Heinke, the owner of "Pappas Pizza" is considering a new oven in which to bake the firm's signature dish, a vegetarian pizza. Oven type “A" can handle 20 pizzas an hour. The fixed costs associated with oven "A" are $20,000 and the variable cost are $2.00 per pizza. Oven "B" is larger and can handle 40 pizza per hour. The fixed costs associated with oven "B" are $30,000 and the variable cost is $1.25 per pizza. The pizzas sell for $14 each. a. What is the breakeven point for each oven? b. If the owner expects to sell 9,000 pizzas, which oven should she purchase? c. At what volume should Janelle switch ovens?

Question 1 Janelle Heinke, the owner of "Pappas Pizza" is considering a new oven in which to bake the firm's signature dish, a vegetarian pizza. Oven type “A" can handle 20 pizzas an hour. The fixed costs associated with oven "A" are $20,000 and the variable cost are $2.00 per pizza. Oven "B" is larger and can handle 40 pizza per hour. The fixed costs associated with oven "B" are $30,000 and the variable cost is $1.25 per pizza. The pizzas sell for $14 each. a. What is the breakeven point for each oven? b. If the owner expects to sell 9,000 pizzas, which oven should she purchase? c. At what volume should Janelle switch ovens?

Principles of Heat Transfer (Activate Learning with these NEW titles from Engineering!)
Principles of Heat Transfer (Activate Learning with these NEW titles from Engineering!)
8th Edition
ISBN:9781305387102
Author:Kreith, Frank; Manglik, Raj M.
Publisher:Kreith, Frank; Manglik, Raj M.
Chapter11: Heat Transfer By Radiation
Section: Chapter Questions
Problem 11.1DP
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Question 1 Janelle Heinke, the owner of “Pappas Pizza" is considering a new oven in which to bake the firm's signature dish, a vegetarian pizza. Oven type "A" can handle 20 pizzas an hour. The fixed costs associated with oven “A" are $20,000 and the variable cost are $2.00 per pizza. Oven “B" is larger and can handle 40 pizza per hour. The fixed costs associated with oven "B" are $30,000 and the variable cost is $1.25 per pizza. The pizzas sell for $14 each. a. What is the breakeven point for each oven? b. If the owner expects to sell 9,000 pizzas, which oven should she purchase? c. At what volume should Janelle switch ovens?
Transcribed Image Text:Question 1 Janelle Heinke, the owner of “Pappas Pizza" is considering a new oven in which to bake the firm's signature dish, a vegetarian pizza. Oven type "A" can handle 20 pizzas an hour. The fixed costs associated with oven “A" are $20,000 and the variable cost are $2.00 per pizza. Oven “B" is larger and can handle 40 pizza per hour. The fixed costs associated with oven "B" are $30,000 and the variable cost is $1.25 per pizza. The pizzas sell for $14 each. a. What is the breakeven point for each oven? b. If the owner expects to sell 9,000 pizzas, which oven should she purchase? c. At what volume should Janelle switch ovens?
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