# Alyssas Custom Cakes currently sells 5 birthday, 2 wedding, and 3 specialty cakes each month for $50,

## Question:

Alyssa’s Custom Cakes currently sells 5 birthday, 2 wedding, and 3 specialty cakes each month for $50, $150, and $100 each, respectively. The cost of labor is $50 per hour including benefits. It takes 90 minutes to produce a birthday cake, 240 minutes to produce a wedding cake, and 60 minutes to produce a specialty cake. Alyssa’s current multifactor productivity ratio is 1.25.

a. Assuming each cake costs the same to make, what is the average cost to produce a cake?

b. Calculate Alyssa’s labor productivity ratio in dollars per hour for each type of cake.

c. Based solely on the labor productivity ratio, which cake should Alyssa try to sell the most?

d. Based on your answer in part (a), is there a type of cake Alyssa should stop selling?

## Step by Step Answer:

**Related Book For**

## Operations management processes and supply chain

**ISBN:** 978-0136065760

9th edition

**Authors:** Lee J Krajewski, Larry P Ritzman, Manoj K Malhotra