The Local Convenience Store Makes Personal Sized Pizzas

question 8

Essay

The local convenience store makes personal sized 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?

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Definitions:

Safety Standards

Regulations and practices designed to ensure the physical safety of workers and prevent workplace accidents or injuries.

Traditional U.S.

Refers to the customary, long-established practices, values, and institutions within the United States.

Collective Bargaining

A dialogue between business owners and employee collectives focused on setting terms for pay rates, job conditions, perks, and various facets of employee benefits and entitlements.

Beck Rights

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