5. Alyssa’s Custom Cakes currently sells 5 birthday, 2 wed-
ding, 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 birth-
day 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. Use the multifactor productivity ratio provided to
calculate the average cost of the cakes produced.
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?
This question was answered on: Sep 21, 2023
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