The Station, a boutique cookie company, needs to create a production process for their new cinnamon malt ball cookies. To help accomplish this, the company has put together some numbers for production costs (per dozen cookies for variable costs).

Process type	Fixed costs	Work expenses	Material costs
Pre-Bake	$159	$1.76	$0.75
Easy to bake	$459	$1.45	$0.50
Quick baking	$689	$1.30	$0.50

The station estimates demand for the half-year will be 765 dozen cinnamon malt ball cookies. Due to the expected popularity of the cookies, the retail price will be $5.50 per dozen.

Based on the projected demand (volume), what type of process should they select?

		Quick baking
		Pre-Bake
		Easy to bake

Under this type of process, the one selected in the previous question, what would be your profits ? (Show your answer to the nearest whole number.)

What would be the break-even point (in unit volume or demand) between the process option you selected above and the "Quick Bake" process option? (Show your answer to the nearest whole number.)

For a unit volume (or level of demand) that is EXACTLY equal to the UNROUNDED breakeven point (derived in the previous question), what would be the total cost? (Show your answer to the nearest whole number.)

TIP: When using the break-even point derived from the previous question, be sure NOT to use it as a rounded number. Instead, be sure to include the exact break-even point, including the digits after the decimal, to get the correct total cost. If necessary, use the direct cell reference to ensure that the correct balance point is used.

For a volume that is 4 units greater than the break-even point (derived in the previous two questions), which process option would be best?

		Pre-Bake
		Easy to bake
		Quick baking

Answer rating: 100% (QA)

Finding the best process for The Stations cinnamon malt ball cookies 1 Selecting the process based on projected demand To analyze which process is mos... View the full answer