Alyssa’s Custom Cakes currently sells 5 birthday, 2 wedding, and 3 specialty cakes each month for $50, $150, and $100 each, respectively. The cost of labor is $50 per hour including benefits. It takes 90 minutes to produce a birthday cake, 240 minutes to produce a wedding cake, and 60 minutes to produce a specialty cake. Alyssa’s current multifactor productivity ratio is 1.25. a. Use the multifactor productivity ratio provided to calculate 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?
Alyssa’s Custom Cakes currently sells 5 birthday, 2 wedding, and 3 specialty cakes each month for $50, $150, and $100 each, respectively. The cost of labor is $50 per hour including benefits. It takes 90 minutes to produce a birthday cake, 240 minutes to produce a wedding cake, and 60 minutes to produce a specialty cake. Alyssa’s current multifactor productivity ratio is 1.25. a. Use the multifactor productivity ratio provided to calculate 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?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Alyssa’s Custom Cakes currently sells 5 birthday, 2 wedding, and 3 specialty cakes each month for $50, $150, and $100 each, respectively. The cost of labor is $50 per hour including benefits. It takes 90 minutes to produce a birthday cake, 240 minutes to produce a wedding cake, and 60 minutes to produce a specialty cake. Alyssa’s current multifactor productivity ratio is 1.25.
a. Use the multifactor productivity ratio provided to calculate 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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