(Solution) 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...

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?

 

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