Brown’s, a local bakery, is worried about increased costs—particularly energy. Last year’s records can provide a fairly good estimate of the parameters for this year. Wende Brown, the owner, does not believe things have changed much, but she did invest an additional $3,000 for modifications to the bakery’s ovens to make them more energy efficient. The modifications were supposed to make the ovens at least 15% more efficient. Brown has asked you to check the energy savings of the new ovens and also to look over other measures of the bakery’s productivity to see if the modifications were beneficial. You have the following data to work with:
LAST YEAR | NOW | |
Production (dozen) | 1,500 | 1,500 |
Labor (hours) | 350 | 325 |
Capital investment ($) | 15,000 | 18,000 |
Energy (BTU) | 3,000 | 2,750 |
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Chapter 1 Solutions
Operations Management: Sustainability and Supply Chain Management (12th Edition)
Additional Business Textbook Solutions
Horngren's Accounting (12th Edition)
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Foundations of Finance (9th Edition) (Pearson Series in Finance)
Principles of Accounting Volume 2
Horngren's Accounting (11th Edition)
Managerial Accounting (5th Edition)
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He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. 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