OPEARATIONS MANAG.REV CUSTOM 2017
OPEARATIONS MANAG.REV CUSTOM 2017
17th Edition
ISBN: 9781323590058
Author: Pearson
Publisher: PEARSON C
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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.

  1. a. What is the break-even point for each oven?
  2. b. If the owner expects to sell 9,000 pizzas, which oven should she purchase?
  3. c. If the owner expects to sell 12,000 pizzas, which oven should she purchase?
  4. d. At what volume should Janelle switch ovens?
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Chapter 7 Solutions

OPEARATIONS MANAG.REV CUSTOM 2017

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