C&A Fast Food has four activities in serving a customer: greet customer, take order, process order, and deliver order. Each activity is staffed by one employee (for a total of four employees). The processing time for each activity is given as follows: Greet customer Take order Process order Deliver order Activity Processing time per customer 2 seconds 30 seconds 60 seconds 5 seconds Assume demand is unlimited. Each employee is paid $7.50 per hour. If one additional employee is added to the bottleneck activity, what will be the cost of direct labor in S per customer?

C&A Fast Food has four activities in serving a customer: greet customer, take order, process order, and deliver order. Each activity is staffed by one employee (for a total of four employees). The processing time for each activity is given as follows: Greet customer Take order Process order Deliver order Activity Processing time per customer 2 seconds 30 seconds 60 seconds 5 seconds Assume demand is unlimited. Each employee is paid $7.50 per hour. If one additional employee is added to the bottleneck activity, what will be the cost of direct labor in S per customer?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Cost of Production

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overhead sum up, accounting for production costs. Total cost data is calculated by combining total direct costs of materials, labor costs, and total production costs.

Question

C&A Fast Food has four activities in serving a customer: greet customer, take order,
process order, and deliver order. Each activity is staffed by one employee (for a total
of four employees). The processing time for each activity is given as follows:
Greet customer
Take order
Process order
Deliver order
Activity
Processing time per customer
2 seconds
30 seconds
60 seconds
5 seconds
Assume demand is unlimited. Each employee is paid $7.50 per hour. If one additional employee is added to
the bottleneck activity, what will be the cost of direct labor in S per customer?

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