Charles Lackey operates a bakery in Idaho Falls, Idaho. Because of its excellent
ID: 416813 • Letter: C
Question
Charles Lackey operates a bakery in Idaho Falls, Idaho. Because of its excellent product and excellent location, demand has increased by 45% in the last year. On far too 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 1,500 loaves per month. Employees are paid S8 per hour. In addition to the labor cost, Charles also has a constant utility cost per month of $750 and a per loaf ingredient cost of $0.40. Current multi actor productivity or 640 work hours per month loaves/dollar your response to three decimal paces ourExplanation / Answer
Output = 1500 loaves
Employees are paid $8 per hour. So a 640 work hour per month, labor cost = 640 hours x $8 = $5120
Per month utility cost = $750
Ingredients cost per loaf = $0.40.So for 1500 loaves per month, ingredients cost = 1500x$0.40 = $600
Total cost = labor cost + utility cost + ingredient cost
= $5120 + $750 + $600
= $6470
Multifactor productivity = output / Total cost
= 1500 loaves / $6470
= 0.232 loaves per dollar