Alyssa’s Custom Cakes currently sells 4 birthday, 3 wedding,and 2 specialty cakes each month for $45, $155, and $105each, respectively. The cost of labor is $50 per hour (includ-ing benefits) and it takes 90 minutes to produce a birthdaycake, 240 minutes to produce a wedding cake, and 60 min-utes to produce a specialty cake. Alyssa’s current multifactorproductivity ratio is 1.30.a. Use the multifactor productivity ratio provided to calcu-late the average cost of the cakes produced.b. Calculate Alyssa’s labor productivity ratio in dollars perhour for each type of cake c. Based solely on the labor productivity ratio, which cakeshould Alyssa try to sell the most?d. Based on your answer in part (a), is there a type of cakeAlyssa should stop selling?
Alyssa’s Custom Cakes currently sells 4 birthday, 3 wedding,
and 2 specialty cakes each month for $45, $155, and $105
each, respectively. The cost of labor is $50 per hour (includ-
ing benefits) and it takes 90 minutes to produce a birthday
cake, 240 minutes to produce a wedding cake, and 60 min-
utes to produce a specialty cake. Alyssa’s current multifactor
productivity ratio is 1.30.
a. Use the multifactor productivity ratio provided to calcu-
late the average cost of the cakes produced.
b. Calculate Alyssa’s labor productivity ratio in dollars per
hour for each type of cake
c. Based solely on the labor productivity ratio, which cake
should Alyssa try to sell the most?
d. Based on your answer in part (a), is there a type of cake
Alyssa should stop selling?
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