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14 May, 12:50

C&A Fast Food has four activities in serving a customer: greet customer, take order, process order, and deliver order. Each activity is staffed by one employee (for a total of four employees). The processing time for each activity is given as follows:

Activity

Processing time per customer

Wage rate

($ Per hour)

Greet customer

2 seconds

5

Take order

30 seconds

5

Process order

60 seconds

15

Deliver order

5 seconds

8

Assume demand is unlimited. If one additional employee is added to the bottleneck activity, what will be the cost of direct labor in $ per customer?

A. 0.275

B. 0.3125

C. 0.40

D.

0.50

+2
Answers (1)
  1. 14 May, 15:09
    0
    B. 0.3125

    Explanation:

    The computation of the cost of direct labor in $ per customer is shown below:

    = Total employee cost : take order time

    where,

    Total employee cost equal to

    = Each employee wages rate per hour * number of employees

    = $7.5 * 5

    = $37.5

    And, the take order time is

    = 30 * 4 employees

    = 120

    So, the cost of direct labor per customer is

    = $37.5 : 120

    = 0.3125
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