Jubelien and Joshua have joined forces to start Rosen old Lettuce Products, a processor of packaged shredded lettuce. Jubelien has years of food processing experience and Joshua has extensive commercial food preparation experience. Together with the help from vendors, they can adequately estimate demand, fixed costs, revenues, and variable cost per 5-pound bag of lettuce. They think a largely manual process will have monthly fixed cost of 37,500Php and variable cost of 1.75Php per 5-pound bag. A more mechanized process will have fixed costs of 75,000Php per month with variable costs of 1.25Php per 5-pound bag. They expect to sell the shredded lettuce for 2.50Php per 5-pound bag. a. What is the break-even quantity for the manual process? b. What is the revenue at the break-even quantity for the manual process? c. What is the break-even quantity for the mechanized process? d. What is the revenue at the break-even quantity for the mechanized process? e. What is the monthly profit or loss of the manual process if they expect to sell 60,000 bags of lettuce per month? f. What is the monthly profit or loss of the mechanized process if they expect to sell 60,000 bags of lettuce per month?
Jubelien and Joshua have joined forces to start Rosen old Lettuce Products, a processor of
packaged shredded lettuce. Jubelien has years of food processing experience and Joshua has
extensive commercial food preparation experience. Together with the help from vendors, they
can adequately estimate demand, fixed costs, revenues, and variable cost per 5-pound bag of
lettuce. They think a largely manual process will have monthly fixed cost of 37,500Php and
variable cost of 1.75Php per 5-pound bag. A more mechanized process will have fixed costs of
75,000Php per month with variable costs of 1.25Php per 5-pound bag. They expect to sell the
shredded lettuce for 2.50Php per 5-pound bag.
a. What is the break-even quantity for the manual process?
b. What is the revenue at the break-even quantity for the manual process?
c. What is the break-even quantity for the mechanized process?
d. What is the revenue at the break-even quantity for the mechanized process?
e. What is the monthly profit or loss of the manual process if they expect to sell 60,000 bags
of lettuce per month?
f. What is the monthly profit or loss of the mechanized process if they expect to sell 60,000
bags of lettuce per month?
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