Determine the monthly break-even volume for the company
Operation Research
1. Evergreen Fertilizer Company produces fertilizer. The company’s fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound. Determine the monthly break-even volume for the company.
2. Graphically illustrate the break-even volume for the Evergreen Fertilizer Company determined in Problem 1.
3. If the maximum operating capacity of Evergreen Fertilizer Company described in Problem 1 is 120,000 pounds of fertilizer per month, determine the break-even volume as a percentage of capacity.
4. If Evergreen Fertilizer Company changes its production process to add a weed killer to the fertilizer in order to increase sales, the variable cost per pound will increase from $0.15 to $0.22. What effect will this change have on the break-even volume computed in Problem 2?
