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d) The revenue for the mechanized process at the break-even quantity = $117857 (round your response to the nearest whole number). e) For monthly sales of 60,000 bags, for the option with manual processing, A&Z Lettuce Products will have a profit of $ (round your response to the nearest whole number and include a is negative)

d) The revenue for the mechanized process at the break-even quantity = $117857 (round your response to the nearest whole number). e) For monthly sales of 60,000 bags, for the option with manual processing, A&Z Lettuce Products will have a profit of $ (round your response to the nearest whole number and include a is negative)

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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K Zania Azlett and Angela Zesiger have joined forces to start A&Z Lettuce Products, a processor of packaged shredded lettuce for institutional use. Zania has years of food processing experience, and Angela has extensive commercial food preparation experience. The process will consist of opening crates of lettuce and then sorting, washing, slicing, preserving, and finally packaging the prepared lettuce. Together, with help from vendors, they think they can adequately estimate demand, fixed costs, revenues, and variable cost per bag of lettuce. They think a largely manual process will have monthly fixed costs of $37,500 and variable costs of $1.75 per bag. A more mechanized process will have fixed costs of $75,000 per month with variable costs of $1.00 per bag. They expect to sell the shredded lettuce for $2.75 per bag. a) The break-even quantity in units for the manual process = 37500 bags (round your response to the nearest whole number) b) The revenue for the manual process at the break-even quantity = $ 103,125 (round your response to the nearest whole number). c) The break-even quantity in units for the mechanized process = 42857 bags (round your response to the nearest whole number). d) The revenue for the mechanized process at the break-even quantity = $ 117857 (round your response to the nearest whole number). e) For monthly sales of 60,000 bags, for the option with manual processing, A&Z Lettuce Products will have a profit of $ (round your response t the nearest whole number and include a minus sign if the profit is negative)
Transcribed Image Text:K Zania Azlett and Angela Zesiger have joined forces to start A&Z Lettuce Products, a processor of packaged shredded lettuce for institutional use. Zania has years of food processing experience, and Angela has extensive commercial food preparation experience. The process will consist of opening crates of lettuce and then sorting, washing, slicing, preserving, and finally packaging the prepared lettuce. Together, with help from vendors, they think they can adequately estimate demand, fixed costs, revenues, and variable cost per bag of lettuce. They think a largely manual process will have monthly fixed costs of $37,500 and variable costs of $1.75 per bag. A more mechanized process will have fixed costs of $75,000 per month with variable costs of $1.00 per bag. They expect to sell the shredded lettuce for $2.75 per bag. a) The break-even quantity in units for the manual process = 37500 bags (round your response to the nearest whole number) b) The revenue for the manual process at the break-even quantity = $ 103,125 (round your response to the nearest whole number). c) The break-even quantity in units for the mechanized process = 42857 bags (round your response to the nearest whole number). d) The revenue for the mechanized process at the break-even quantity = $ 117857 (round your response to the nearest whole number). e) For monthly sales of 60,000 bags, for the option with manual processing, A&Z Lettuce Products will have a profit of $ (round your response t the nearest whole number and include a minus sign if the profit is negative)
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