Problem with explanation. You manage a large retail supercenter that sells groceries and otherproducts to 30,000 customers per week. Currently, you employ 80 check-out clerks and 10 automated check-out machines (customers scan and payfor their purchases without a clerk's assistance). Each clerk is paid wagesand fringe benefits of 800 dollars per week. It also cost you 800 dollars perweek to lease each machine (price includes installation, software supportand servicing). A vendor has offered you to lease you additional machinesat this price. You estimate that by leasing 10 more machines you can meetyour service requirements with 30 fewer clerks.1. Should you lease the aditional machines or continue to service yourcustomers with your current input mix?2. You conduct additional analysis and estimate that you can service the30,000 customers with the following combinations of clerks and machines.Calculate the total costs for each of these combinations. What combinationof inputs serves the customer at the lowest possible cost?ClerksMachines8010502030302240155012603. Suppose that the marginal product of clerks at the optimal inputcombination is 500. Explain in words what this means. What is the marginalproduct of machines at this point? Explain why.4. Suppose that the cost of leasing a machine declines to $500 per week.What is your new optimal input mix? How does this affect your graph?5. Are there any others that should be considered in making this decision onthe optimal mix of machineries and clerks. Discuss briefly.

Solution: Number of check-out clerks employed = 80 cost of check-out clerks = $800 per week…

Answered: Problem with explanation.

Business

Accounting

Problem with explanation.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

Problem with explanation.

You manage a large retail supercenter that sells groceries and other
products to 30,000 customers per week. Currently, you employ 80 check-
out clerks and 10 automated check-out machines (customers scan and pay
for their purchases without a clerk's assistance). Each clerk is paid wages
and fringe benefits of 800 dollars per week. It also cost you 800 dollars per
week to lease each machine (price includes installation, software support
and servicing). A vendor has offered you to lease you additional machines
at this price. You estimate that by leasing 10 more machines you can meet
your service requirements with 30 fewer clerks.
1. Should you lease the aditional machines or continue to service your
customers with your current input mix?
2. You conduct additional analysis and estimate that you can service the
30,000 customers with the following combinations of clerks and machines.
Calculate the total costs for each of these combinations. What combination
of inputs serves the customer at the lowest possible cost?
Clerks
Machines
80
10
50
20
30
30
22
40
15
50
12
60
3. Suppose that the marginal product of clerks at the optimal input
combination is 500. Explain in words what this means. What is the marginal
product of machines at this point? Explain why.
4. Suppose that the cost of leasing a machine declines to $500 per week.
What is your new optimal input mix? How does this affect your graph?
5. Are there any others that should be considered in making this decision on
the optimal mix of machineries and clerks. Discuss briefly.

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