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. Daily demands, along with price and material cost per beverage, are given below: Beverages sold Price per beverage 400 $2.00 Material per beverage ($) $0.50 Regular Coffee Beverages sold Price per beverage Material per beverage ($) Cappuccino 100 $3.00 $0.75 Regular Coffee 400 $2.00 $0.50 Vienna coffee 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 vanilla 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: D 200 $4.00 $1.25 Vienna Cappuccino coffee 100 200 $3.00 $4.00 $0.75 $1.25 Eiskaffee 75 $6.00 $1.00 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 0.63%. (Enter your response as a percent rounded to two decimal places and include a minus sign if productivity decreases.)
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. Daily demands, along with price and material cost per beverage, are given below: Beverages sold Price per beverage 400 $2.00 Material per beverage ($) $0.50 Regular Coffee Beverages sold Price per beverage Material per beverage ($) Cappuccino 100 $3.00 $0.75 Regular Coffee 400 $2.00 $0.50 Vienna coffee 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 vanilla 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: D 200 $4.00 $1.25 Vienna Cappuccino coffee 100 200 $3.00 $4.00 $0.75 $1.25 Eiskaffee 75 $6.00 $1.00 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 0.63%. (Enter your response as a percent rounded to two decimal places and include a minus sign if productivity decreases.)
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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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. Daily demands, along with price and material costs
per beverage, are given below:
Regular
Coffee
Beverages sold
Price per beverage
400
$2.00
Material per beverage ($) $0.50
Beverages sold
Price per beverage
Material per beverage ($)
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 vanilla 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:
D
Regular
Coffee
Cappuccino
100
$3.00
$0.75
400
$2.00
$0.50
Vienna
coffee
200
$4.00
$1.25
Cappuccino
100
$3.00
$0.75
Vienna
coffee
200
$4.00
$1.25
Eiskaffee
75
$6.00
$1.00
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 0.63%. (Enter your response as a percent rounded to two decimal places and include a minus sign if productivity decreases.)
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