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# Managerial Decision Making - CVP Analysis

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A distributor of pre-washed shredded lettuce is opening a new plant and considering whether to use mechanized process or manual process to prepare the product. The manual process will have a fixed cost of \$43,400 per month and a variable cost of \$1.80 per 5-pound bag. The mechanized process would have a fixed cost of \$84,600 per month and a variable cost of \$1.30 per bag. The company expects to sell each bag of shredded lettuce for \$2.50.

(a)Find the break-even point for each process.

(b)What is the monthly profit or loss if the company chooses the manual process and sells 70000 bags per month?

##### Solution Summary

Solution depicts the steps to calculate BEP and monthly profit in the given case.

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###### Education
• BEng (Hons) , Birla Institute of Technology and Science, India
• MSc (Hons) , Birla Institute of Technology and Science, India
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