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Janelle, the owner of Ha 'Peppas' is considering a new oven to bake vegetarian pizza. Oven type A can handle 20 pizza an hour. The fixed cost for A is $20000 and variable cost is $2.00 per pizza.

Oven B is larger can handle 40 pizza per hour. B - Fixed cost $30000 variable cost $1.25 per pizza. Pizza sells for $14 each.

1. What is the break-even point for each oven?

2. If owner expects to sell 9000 pizza, which oven should she purchase?

3. If owner expects to sell 12000 pizza, which oven should she purchase?

4. At what volume should Janelle switch oven?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91411675

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