The Beach Party Packages Horseradish and Mustards in a Factory

Essay

The Beach Party packages horseradish and mustards in a factory that can operate one, two, or three shifts. The product sells for $10 a case and has variable costs of $4 per case. Fixed costs are related to the number of shifts that are operated, with the estimated costs as follows:
$$\begin{array} { l r r r } & { \text { Daily volume } } & { \text { Fixed Costs } } \\\text { 1. shift } & 0 - 2,000 & \$ 3,000 \\2 \text { shifts } & 2,001 - 4,000 & \$ 5,700 \\3 \text { shifts } & 4,001 - 6,000 & \$ 8,200\end{array}$$
Required:
(a) Determine the break-even point(s).
(b) If Beach Party can sell all it can produce, how many shifts should be operated?