Question $5(30$ points$)$

Two manufacturing processes are available for producing shredded lettuce: a largely manual process and a mechanized process. The manual process incurs monthly fixed costs of $$37,500$ and variable costs of $$1\mathrm{.}75$ per bag. On the other hand, the mechanized process has fixed costs of $$75,000$ per month and variable costs of $$1\mathrm{.}25$ per five$-$pound bag. The anticipated selling price for the shredded lettuce is $$2\mathrm{.}50$ per five$-$pound bag.

a$)$ What is the monthly profit or loss of the mechanized process if they expect to sell $60,000$ bags of lettuce per month? $(10$ points$)$

b$)$ At what quantity $($demand$)$ would you be indifferent to the process selected? $(10$ points$)$

c$)$ Over what range of demand would the manual process be preferred over the mechanized process? Over what range of demand would the mechanized process be preferred over the manual process? $(10$ points$)$