Dot’s Restaurant must decide between two technology processes in their kitchen. They only serve dinner after 4 p.m. on a small island called Sanibel. The restaurant is open 250 days per year. Dot and her husband, Ham, are retired. They became bored playing golf five times a week and decided to open this boutique restaurant. Process A uses an induction oven and microwave process with a fixed cost of $44,000 and a variable cost of $4.19 per meal. Process B uses a gas fired oven process with heating lamps with a fixed cost of $28,000 and a variable cost of

$5.86 per meal. Process A speeds up cooking and delivery time. The average selling price per meal is $31.38.

a. What is the break-even quantity?

b. If the restaurant manager expects to sell 10,000 meals, which option, A or B, is best? Justify.

c. Is the restaurant profitable if they purchase the process option you recommend in part (b)?