The Local Convenience Store Makes Personal Pan Pizzas

question 97

Essay

The local convenience store makes personal pan pizzas. Currently, their oven can produce 55 pizzas per hour. It has a fixed cost of $4,000, and a variable cost of $0.31 per pizza. The owner is considering a bigger oven that can make 90 pizzas per hour. It has a fixed cost of $6,200, but a variable cost of $0.20 per pizza.
a. At what quantity do the two ovens have equal costs?
b. If the owner expects to sell 29,000 pizzas, should he get the new oven?

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Definitions:

Out-Of-Pocket Expenditures

Expenses for medical care that aren't reimbursed by insurance and are paid directly by the patient.

Patient Protection

Legal and ethical measures and policies designed to safeguard patients' rights, privacy, and well-being in healthcare settings.

Affordable Care Act

A comprehensive healthcare reform law enacted in 2010 in the United States, aimed at increasing health insurance coverage and reducing healthcare costs.

Part-Time Employees

Workers who are employed for fewer hours than the full-time standard, often receiving reduced benefits and compensation.