The Morning Brew Coffee Shop sells Regular, Cappuccino, and Vienna blends of coffee. The shop's current daily labor cost is $320, the equipment cost is $125, and the overhead cost is $225 Daly demands, along with price and material costs per beverage, are given below: Regular Coffee Beverages sold Price per beverage 400 $2.00 Material per beverage (5) $0.50 Beverages sold Price per beverage Material per beverage (5) Regular Coffee 400 Cappuccino 150 $3.00 $0.75 Harald Luckerbauer, the manager at Morning Brew Coffee Shop, would like to understand how adding Eiskaffee (a German coffee beverage of chilled coffee, milk, sweetener, and vanila ice cream) will alter the shop's productivity. Her market research shows that Eiskaffee will bring in new customers and not cannibalize current demand. Assuming that the new equipment is purchased before Eiskaffee is added to the menu, Harald has developed new average daily demand and cost projections. The new equipment cost is $200, and the overhead cost is $350. Modified daily demands, as well as price and material costs per beverage for the new product line, are given below: $2.00 $0.50 Vienna coffee Cappuccino 150 100 $4.00 $1.25 Vienna coffee 100 $3.00 $4.00 $0.75 $1.25 Eiskaffee 50 $6.00 $1.50 a. Calculate the change in labor and multifactor productivity if Eiskaffee is added to the menu. (Note: Be sure to round each individual labor and multifactor productivity to no fewer than two decimal places before calculating the percentage changes) The change in labor productivity if Eiskaffee is added to the menu is% (Enter your response as a percent rounded to two decimal places and include a minus sign if productivity decreases) The change in multifactor productivity if Eiskaffee is added to the menu is. (Enter your response as a percent rounded to two decimal places and include a minus sign if productivity decreases) b. If everything else remains unchanged, how many units of Eiskaffeo would have to be sold to ensure that the multifactor productivity increases from its current level? At least units of Eiskaffee would have to be sold to guarantee the increase in multifactor productivity. (Enter your response rounded up to the next whole number)
The Morning Brew Coffee Shop sells Regular, Cappuccino, and Vienna blends of coffee. The shop's current daily labor cost is $320, the equipment cost is $125, and the overhead cost is $225 Daly demands, along with price and material costs per beverage, are given below: Regular Coffee Beverages sold Price per beverage 400 $2.00 Material per beverage (5) $0.50 Beverages sold Price per beverage Material per beverage (5) Regular Coffee 400 Cappuccino 150 $3.00 $0.75 Harald Luckerbauer, the manager at Morning Brew Coffee Shop, would like to understand how adding Eiskaffee (a German coffee beverage of chilled coffee, milk, sweetener, and vanila ice cream) will alter the shop's productivity. Her market research shows that Eiskaffee will bring in new customers and not cannibalize current demand. Assuming that the new equipment is purchased before Eiskaffee is added to the menu, Harald has developed new average daily demand and cost projections. The new equipment cost is $200, and the overhead cost is $350. Modified daily demands, as well as price and material costs per beverage for the new product line, are given below: $2.00 $0.50 Vienna coffee Cappuccino 150 100 $4.00 $1.25 Vienna coffee 100 $3.00 $4.00 $0.75 $1.25 Eiskaffee 50 $6.00 $1.50 a. Calculate the change in labor and multifactor productivity if Eiskaffee is added to the menu. (Note: Be sure to round each individual labor and multifactor productivity to no fewer than two decimal places before calculating the percentage changes) The change in labor productivity if Eiskaffee is added to the menu is% (Enter your response as a percent rounded to two decimal places and include a minus sign if productivity decreases) The change in multifactor productivity if Eiskaffee is added to the menu is. (Enter your response as a percent rounded to two decimal places and include a minus sign if productivity decreases) b. If everything else remains unchanged, how many units of Eiskaffeo would have to be sold to ensure that the multifactor productivity increases from its current level? At least units of Eiskaffee would have to be sold to guarantee the increase in multifactor productivity. (Enter your response rounded up to the next whole number)
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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Question
Transcribed Image Text:The Morning Brew Coffee Shop sells Regular, Cappuccino, and Vienna blends of coffee. The shop's current daily labor cost is $320, the equipment cost is $125, and the overhead cost is $225
Daly demands, along with price and material costs per beverage, are given below:
Regular
Coffee
Beverages sold
Price per beverage
400
$2.00
Material per beverage (3) $0.50
Cappuccino
150
$3.00
$0.75
Vienna
coffee
100
$4.00
$1.25
Harald Luckerbauer, the manager at Morning Brew Coffee Shop, would like to understand how adding Eiskaffee (a German coffee beverage of chilled coffee, milk, sweetener, and vanila ice cream)
will alter the shop's productivity. Her market research shows that Eiskaffee will bring in new customers and not cannibalize current demand. Assuming that the new equipment is purchased before
Eiskaffee is added to the menu, Harald has developed new average daily demand and cost projections. The new equipment cost is $200, and the overhead cost is $350. Modified daily demands, as
well as price and material costs per beverage for the new product line, are given below:
Di
Regular
Coffee
Beverages sold
400
Price per beverage
$2.00
Material per beverage (5) $0.50
if Eiskaffee is added to the menu. (Note: Be sure to round each individual labor and multifactor productivity to no fewer than two decimal
Cappuccino
Vienna
coffee
150
$3.00
100
$4.00
$0.75 $1.25
Eiskaffee
50
$6.00
$1.50
a. Calculate the change in labor and multifactor productivity
places before calculating the percentage changes)
The change in labor productivity if Eiskaffee is added to the menu is% (Enter your response as a percent rounded to two decimal places and include a minus sign if productivity decreases)
The change in multifactor productivity if Eiskaffee is added to the menu is. (Enter your response as a percent rounded to two decimal places and include a minus sign if productivity decreases)
b. If everything else remains unchanged, how many units of Eiskaffee would have to be sold to ensure that the multifactor productivity increases from its current level?
At least units of Eiskaffee would have to be sold to guarantee the increase in multifactor productivity. (Enter your response rounded up to the next whole number)
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