Charles Lackey operates a bakery in ldaho Falls daho. Because o its excellent pr
ID: 414875 • Letter: C
Question
Charles Lackey operates a bakery in ldaho Falls daho. Because o its excellent product and excellent location demand has increased by 25% in the last year. O a to many occasions, customers have not been able to purchase the bread of their choice. Because of the size of the store, no new ovens can be added. At a staff meeting, one employee suggested ways to load the ovens differently so that more loaves of bread can be baked at one time. This new process will require that the ovens be loaded by hand, requiring additional manpower. This is the only production change that will be made in order to meet the increased demand. The bakery currently makes 1,800 loaves per month. Employees are paid $8 per hour. In addition to the labor cost, Charles also has a constant utility cost per month of $550 and a per loaf ingredient cost of $0.40. Current multifactor productivity for 640 work hours per month-282 loaves/dollar (round your response to three decimal places) After increasing the number of work hours to 800 per month, the multifactor productivity- loaves/dollar round your response to three decimal placesExplanation / Answer
Current scenario Total work hrs 640 hrs Total production/month 1,800.00 loaves Employee cost 8 per hr Ingradient cost 0.4 per loaf Utility cost 550 per month Total cost per month 6,390.00 $ Includes all the three costs(Utility,labor and ingradient for the month) Multifactor productivity 0.2817 Total production/Total Cost per month Future scenario Demand increases by 25% Total work hrs 800 hrs manpower increases by 25% Total production/month 2,250.00 loaves Production goes up by 25% Employee cost 8 per hr Ingradient cost 0.4 per loaf Utility cost 550 per month Total cost per month 7,850.00 $ Includes all the three costs(Utility,labor and ingradient for the month) Multifactor productivity 0.287 Total production/Total Cost per month