John and Ben they think a largely manual process will have monthly fixed cost of 75,000 and variable cost $3.50 per bag. A more mechanized process will have fixed costs of $125,000 per month and variable costs of $2.50 per 10lb bag. They expect to sell the shredded lettuce for $5.00 per 10lb bag.
A. What is the break-even quantity for each process?
B. What is the revenue at break-even for each process?
C. What is the monthly profit (loss) for each process if they expect to sell 60,000 bags of lettuce a month?
D. At what quantity would John and Brenda be indifferent to the process selected?
E. Over what range of demand would the manual process be preferred over mechanized process? Over what range of demand would the mechanized process be preferred over the manual process?