Question: [15 points] Smoky Pit BBQ restaurant must decide between two manufacturers for the new smoker grills. Both grills have the same capacity and produce the
[15 points] Smoky Pit BBQ restaurant must decide between two manufacturers for the new smoker grills. Both grills have the same capacity and produce the similar quality BBQ. The first manufacturers grill (A) costs $2,500 and it uses wooden pellets. It uses $2.50 worth of fuel per hour. The second manufacturers grill (B) costs $4,000 and it uses charcoal which costs $1.90 worth of fuel per hour. The manager estimates that the grill will be used for 40 hours a week and 45 weeks a year. a. What is the break-even quantity (of use hours) between the two grills? (Note: Break-even quantity (Q* = (Fixed cost 1 Fixed cost 2)/(Variable cost 2 Variable cost 1)) b. Under current estimation, which grill, A or B, is best? Show all calculations. c. If the fuel cost of pallets (for grill A) increases to $2.75 and charcoal cost increases to $2.00, would the decision in (b) change? Show all calculations and explain
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