# solution

Janelle? Heinke, the owner of? Ha’Peppas!, is considering a new oven in which to bake the? firm’s signature? dish, vegetarian pizza. Oven type A can handle

22

pizzas an hour. The fixed costs associated with oven A are

\$22,500

and the variable costs are

\$2.50

per pizza. Oven B is larger and can handle

42

pizzas an hour. The fixed costs associated with oven B are

\$30,000

and the variable costs are

\$1.50

per pizza. The pizzas sell for

\$15.00

each.

?a) The? break-even point in units for oven type A? =

enter your response here

units ?(round your response to the nearest whole? number).

The? break-even point in units for oven type B? =

enter your response here

units ?(round your response to the nearest whole? number).

?b) If Janelle is expecting that the pizza shop is going to be able to sell

8,000

?pizzas, then she should select oven

?

B

A

A or B (Equal Profit)

.

?c) If Janelle is expecting that the pizza shop is going to be able to sell

14,000

?pizzas, then she should select oven

?

A or B (Equal Profit)

B

A

.

?d) The volume at which Oven A and Oven B have the same cost? (crossover point) and Janelle would be indifferent? =

enter your response here

pizzas ?(round your response to the nearest whole? number).