A food truck with two workers has a deep-fryer that it uses to make doughnuts in...
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A food truck with two workers has a deep-fryer that it uses to make doughnuts in addition to other fried foods. Demand has averaged about 35 doughnuts per hour. It takes the first worker 1 minute to take and process payment for an order and 2 minutes for the second worker to make a doughnut. Workers earn $15.00 per hour. The doughnuts are sold at $2.00 each and use $0.10 worth of ingredients. Fixed costs amount to $10 per hour. An offer to acquire a dedicated doughnut making machine has been made to the food truck owner, allowing doughnuts to be made in 1.5 minutes but would increase fixed costs by $3.00 an hour. From a profit point of view, is it worth it to the owner to install a dedicated doughnut making machine? Support your answer with a profit analysis. A food truck with two workers has a deep-fryer that it uses to make doughnuts in addition to other fried foods. Demand has averaged about 35 doughnuts per hour. It takes the first worker 1 minute to take and process payment for an order and 2 minutes for the second worker to make a doughnut. Workers earn $15.00 per hour. The doughnuts are sold at $2.00 each and use $0.10 worth of ingredients. Fixed costs amount to $10 per hour. An offer to acquire a dedicated doughnut making machine has been made to the food truck owner, allowing doughnuts to be made in 1.5 minutes but would increase fixed costs by $3.00 an hour. From a profit point of view, is it worth it to the owner to install a dedicated doughnut making machine? Support your answer with a profit analysis.
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To determine whether its worth it for the owner to install a dedicated doughnut making machine lets perform a profit analysis for both scenarios the c... View the full answer
Related Book For
Introduction To Materials Management
ISBN: 978-9386873248
8th edition
Authors: Arnold J. R. Tony, Gatewood Ann K., M. Clive Lloyd N. Chapman Stephen
Posted Date:
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