The Local Convenience Store Makes Personal Pan Pizzas

question 52

Essay

The local convenience store makes personal pan pizzas.Currently,its process makes complete pizzas,fully cooked,for the customer.This process has a fixed cost of $20,000,and a variable cost of $1.75 per pizza.The owner is considering a different process that can make pizzas in two ways: completely cooked (as before),or partially cooked and then flash frozen for the customer to finish heating at home.This alternate process has a fixed cost of $24,000,but a lower variable cost (because much less energy is used in baking)of $1.25 per pizza.
a.What is the crossover point between the existing process and the proposed process?
b.If the owner expects to sell 9,000 pizzas,should he get the new oven?

---

Definitions:

Glass Ceiling Effect

A metaphorical barrier preventing minorities and women from advancing beyond a certain hierarchy level due to discrimination or implicit biases.

Organisational Responsibility

The duty of an organization to act in the best interests of their environment and society as a whole.

Intellectual Capital

The intangible value of a company's expertise, knowledge-based assets, and employee skills that provide competitive advantage.

Workforce

The group of individuals engaged in or available for work, either in a single company, industry, or geographical area.