M R . K’S HAIR SALON Mr. K’s is a very popular ha (2025)

Question

Answered step-by-step

To answer the questions, we need to calculate the direct labor costs for serving one guest under the current setup and then evaluate the costs under each of the two proposed alternatives.

Current Setup

1. Activity Times and Assignments:

   • S1: Activity 1 (10 minutes)
   • S2: Activities 2 and 3 (10 + 10 = 20 minutes)
   • S3: Activities 4 and 5 (25 + 5 = 30 minutes)

2. Wage Rate:

   • $18 per hour

3. Direct Labor Cost Calculation:

   • Convert minutes to hours for each server:
     • S1: 10 minutes = 10/60 hours
     • S2: 20 minutes = 20/60 hours
     • S3: 30 minutes = 30/60 hours
   • Calculate cost for each server:
     • S1: \( \frac{10}{60} \times 18 = 3 \) dollars
     • S2: \( \frac{20}{60} \times 18 = 6 \) dollars
     • S3: \( \frac{30}{60} \times 18 = 9 \) dollars
   • Total cost per guest: \( 3 + 6 + 9 = 18 \) dollars

Alternative I: Hire a New Employee

• Hiring a new employee to help one server does not change the tasks or time per guest, so the direct labor cost remains the same as the current setup: $18 per guest.

Alternative II: Reassign Activity 5 from S3 to S1

1. New Assignments:

   • S1: Activities 1 and 5 (10 + 5 = 15 minutes)
   • S2: Activities 2 and 3 (20 minutes)
   • S3: Activity 4 (25 minutes)

2. Direct Labor Cost Calculation:

   • Convert minutes to hours for each server:
     • S1: 15 minutes = 15/60 hours
     • S2: 20 minutes = 20/60 hours
     • S3: 25 minutes = 25/60 hours
   • Calculate cost for each server:
     • S1: \( \frac{15}{60} \times 18 = 4.5 \) dollars
     • S2: \( \frac{20}{60} \times 18 = 6 \) dollars
     • S3: \( \frac{25}{60} \times 18 = 7.5 \) dollars
   • Total cost per guest: \( 4.5 + 6 + 7.5 = 18 \) dollars

Summary

• Current Setup Cost: $18 per guest
• Alternative I Cost: $18 per guest
• Alternative II Cost: $18 per guest

Both alternatives result in the same direct labor cost per guest as the current setup.