Question: please answer part 1 and part 2 Machine Fixed Cost ($) Variable Cost/Unit Max Capacity PART 1: Listed at the right are the Fixed and

please answer part 1 and part 2
please answer part 1 and part 2 Machine Fixed Cost ($) Variable
Cost/Unit Max Capacity PART 1: Listed at the right are the Fixed

Machine Fixed Cost ($) Variable Cost/Unit Max Capacity PART 1: Listed at the right are the Fixed and Variable costs and maximum capacity for each food wrapping machine being considered. (12 pts) Model 740B 28,000 3 10,000 2 20,000 Model 1000-C Model 1200-D 40,000 16,000 4 6,000 1. What is the breakeven point for each machine if average revenue per unit is $7.00? (3 points each) BEP1408 Answer: units BEP 1000-C = Answer: units BEP1200-D Answer: units 2. Given the BEPS you just calculated and the data in the above chart, which (if any) machine would you select if daily demand was expected to range between 4,500 and 7,000 over the next 3 years? Justify in 1 sentence or less. (3 pts) Machine: Justification: PART 2: Wes and Steve also want to evaluate an internal process (P) that would be used to clean and sanitize kitchen and lunch truck equipment. The fixed and variable costs and capacities for each process are listed below. Utilize this information to answer questions that follow. (13 pts) Process Fixed Variable Capacity P1 6,000 16 1,000 1. What are the low-cost output ranges for each alternative given the cost info and capacity info at left? (show ALL pertinent math below and relevant ranges and notations in the 0- continuum below). P2 7,200 8 600 P3 10,000 4 3,000 Ranges (3 pts)/Supporting Math (below the line) (6 pts) Final Answer Ranges (3 pts): Process Range Answer 0 0- 2. If demand for sanitizing was expected to range between 400 and 1,300 units for the next year, which process would you select? Explain in one sentence. (1 pt) Answer: Explanation: Background: Wes and Steve are partners in a lunch truck company that operates a central kitchen and operates lunch trucks that travel to various locations in Philadelphia, Monday-Friday. The lunch trucks deliver pre-packaged healthy sandwich and salad alternatives, fresh fruit and pre-packaged low-fat desserts and canned beverages. Together, the partners have to make many decisions about how to structure the operational aspects of the business so that it is cost effective, efficient and profitable. Current Situation: Given the current health concerns surrounding COVID, Wes and Steve must modify some of their exisiting methods for operating their central kitchen and lunch trucks. They are considering 2 key decisions: Part 1: The central kitchen must now pre-wrap all desserts being sold via the lunch trucks. This will require the purchase of an automated food wrapping machine to ensure efficiency. Wes and Steve have narrowed their choices down to 3 different models-with cost and capacity information as shown in Part 1 on the next page. Part 2: Wes and Steve ALSO need to implement a new internal process to clean and sanitize kitchen and lunch truck equipment. The fixed and variable costs and capacities for each process are listed in Part 2 on the next page. Utilize this information to determine the lowest cost range for production and to answer questions that follow. For Completion on Page 2: Complete/show all work for the mathematics required; round to 2 decimal points. Answer the relevant questions and provide brief (less than 1 sentence) explanation as necessary

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!