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Cesar's Bottlers bottles soft drinks in a factory that can operate one shift, two shifts, or...

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Accounting

Cesar's Bottlers bottles soft drinks in a factory that canoperate one shift, two shifts, or three shifts per day. Each shiftis eight hours long. The factory is closed on weekends. The salesprice of $4 per case bottled and the variable cost of $2.90 percase remain constant regardless of volume. Cesar's Bottlers canincrease volume by opening and staffing additional shifts. Thecompany has the following three choices. Daily Volume Range (Numberof Cases Bottled)   Total Fixed Costs per Day 1Shift   0–2,000   $  1,950   2 Shifts   2,001–3,600      3,710   3 Shifts  3,601–5,000       5,090  Required:

a. Calculate the break-even point(s).

b-1. Calculate the profit (or loss) for each alternative,assuming Cesar’s Bottlers can sell all the units it canproduce.

b-2. Should Cesar's Bottlers operate at one, two, or threeshifts?

Answer & Explanation Solved by verified expert
3.7 Ratings (374 Votes)
Question 1 Calculation of Break Even Point for all the Three Alternative As there are different options available with different shifts so break Even Point will be different for all the    See Answer
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