The Bountiful Bakery Is Considering Hiring Another Pastry Chef

question 178

Multiple Choice

The Bountiful Bakery is considering hiring another pastry chef.The bakery knows the average product of its chefs currently is 15 dozen croissants per day.It also believes that the next chef hired will produce an extra 12 dozen croissants per day.A dozen croissants sell for $30.The bakery should hire another worker:

• A)only if the new chef's marginal product is 12 dozen or more.
• B)only if the new chef's daily wage is $450 or less.
• C)only if the new chef's daily wage is $360 or less.
• D)because the marginal product is below the average product.

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Definitions:

Budget

An estimate of income and expenditure for a set period of time, serving as a financial plan and control method.

Budgeted Balance Sheet

A budgeted balance sheet forecasts a company's financial position at the end of a future period, projecting assets, liabilities, and equity.

Capital Expenditure Budgets

Financial plans for an organization's purchases of long-term assets that will be used for more than one year.

Manufacturing Budgets

Financial plans that allocate how much a company intends to spend on production costs to produce a certain amount of goods within a period.