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An Indian Food Truck is considering a new tandoori oven in which to bake naan. Tandoor A can handle 22 naan in an hour. The fixed costs associated with commercial grade tandoori A are $ 2,000 and the variable costs are $1.00 per naan. Oven B is larger and can handle 44 naan per hour. However, neither oven should be left on all day. The fixed costs associated with tandoori B are $3,500 and the variable costs are $ .75 per naan. The naan sell for $3.00 each.

Required:
a. What is the breakeven point in for tandoori A and B?
b. Which tandoori should be chosen if it is expected to make thousands of naan each year?

Answer :

Answer:

24 dollars

Explanation:

ΔABC ~ ΔEFD

is the pyramid change of the mathametical dad monet

a. The breakeven point for tandoori A and B is 1000 and 1556 respectively.

b. The tandoori B should be selected as it contains less variable cost.

a. The break-even point is

  • For tandoori A

= 2,000 ÷($3 - $1)

= 1,000

  • For tandoori B

= 3500 ÷ ($3 - $0.75)

= 1556

b.

The Point of indifference is

= (3500 - 2000) ÷ ($1 - $0.75)

= 6000

The following things should be considered:

  • For tandoori A, it contains a lesser fixed cost.
  • For tandoori B, it contains lesser variable cost also it makes high yearly production.

Therefore we can conclude that the tandoori B should be selected as it contains less variable cost.

Learn more about the break-even point here: brainly.com/question/13770712

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