Managerial decision making fixed and variable costs

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Managerial Decision Making, Fixed and Variable Costs Break-even
A distributer of prewashed shredded lettuce is opening a new plant and considering whether to use mechanized process or manual process to prepare the product. The manual process will have a fixed cost of $43,400 per month and a variable cost of $1.80 per 5-pound bag. The mechanized process would have a fixed cost of $84,600 per month and a variable cost of $1.30 per bag. The company expects to sell each bag of shredded lettuce for $2.50.
(a) Find the break-even point for each process.
(b) What is the monthly profit or loss if the company chooses the manual process and sells 70000 bags per month?

Reference no: EM13366292

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