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Lackey's, a local bakery is worried about increased costs- particularly energy. Last year's record can provide a fairly good estimate of the parameters for this year. Charles Lackey, the owner, does not believe things have changed much, but he did invest an additional $3,000 for modifications to the bakery's ovens to make them more energy efficient. The modifications were supposed to make at least 15% more efficient, but extra labor hours were required for workers to become familiar with the process changes. Lackey has asked you to check the energy savings of the new ovens and also to look over other measures of the bakery's productivity to see if modifications were beneficial. You have the following data to work with.

Lackey's, a local bakery is worried about increased costs- particularly energy. Last year's record can provide a fairly good estimate of the parameters for this year. Charles Lackey, the owner, does not believe things have changed much, but he did invest an additional $3,000 for modifications to the bakery's ovens to make them more energy efficient. The modifications were supposed to make at least 15% more efficient, but extra labor hours were required for workers to become familiar with the process changes. Lackey has asked you to check the energy savings of the new ovens and also to look over other measures of the bakery's productivity to see if modifications were beneficial. You have the following data to work with.

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Lackey's, a local bakery is worried about increased costs- particularly energy. Last year's record can provide a fairly good estimate of the parameters for this year. Charles Lackey, the owner, does not believe things have changed much, but he did invest an additional $3,000 for modifications to the bakery's ovens to make them more energy efficient. The modifications were supposed to make at least 15% more efficient, but extra labor hours were required for workers to become familiar with the process changes. Lackey has asked you to check the energy savings of the new ovens and also to look over other measures of the bakery's productivity to see if modifications were beneficial. You have the following data to work with.
Transcribed Image Text:Lackey's, a local bakery is worried about increased costs- particularly energy. Last year's record can provide a fairly good estimate of the parameters for this year. Charles Lackey, the owner, does not believe things have changed much, but he did invest an additional $3,000 for modifications to the bakery's ovens to make them more energy efficient. The modifications were supposed to make at least 15% more efficient, but extra labor hours were required for workers to become familiar with the process changes. Lackey has asked you to check the energy savings of the new ovens and also to look over other measures of the bakery's productivity to see if modifications were beneficial. You have the following data to work with.
Last Year Now Production 1,500 1,500 (dozen) Labor (hours) Capital investment ($) Energy (BTU) 350 325 15,000 18,000 3,000 2,750 As part of a study, you are assigned the task of evaluating the improvement in productivity of small businesses. One of the small businesses you are to evaluate is Lackey's. Determine the multifactor productivity using the following costs. Labor $8 per hour Capital 0.83% per month of investment Energy $0.60 per BTU
Transcribed Image Text:Last Year Now Production 1,500 1,500 (dozen) Labor (hours) Capital investment ($) Energy (BTU) 350 325 15,000 18,000 3,000 2,750 As part of a study, you are assigned the task of evaluating the improvement in productivity of small businesses. One of the small businesses you are to evaluate is Lackey's. Determine the multifactor productivity using the following costs. Labor $8 per hour Capital 0.83% per month of investment Energy $0.60 per BTU
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