So and Ralph have joined forces to start SoRap Chip Products, a processor of packaged okra chips. So has years of food processing experience, and Ralph has extensive commercial food preparation experience. Together with the help from vendors, they can adequately estimate demand, fixed costs, revenues, and variable cost per 5-pound bag of okra. They think a largely manual process will have monthly fixed cost of 37,500Php and variable cost of 1.75Php per 5-pound bag. A more mechanized process will have fixed costs of 75,000Php per month with variable costs of 1.25Php per 5-pound bag. They expect to sell the okra chips for 2.50Php per 5-pound bag. What is the break-even quantity for the manual process?

So and Ralph have joined forces to start SoRap Chip Products, a processor of packaged okra chips. So has years of food processing experience, and Ralph has extensive commercial food preparation experience. Together with the help from vendors, they can adequately estimate demand, fixed costs, revenues, and variable cost per 5-pound bag of okra. They think a largely manual process will have monthly fixed cost of 37,500Php and variable cost of 1.75Php per 5-pound bag. A more mechanized process will have fixed costs of 75,000Php per month with variable costs of 1.25Php per 5-pound bag. They expect to sell the okra chips for 2.50Php per 5-pound bag. What is the break-even quantity for the manual process?

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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