Table 65 -Refer to Table 6

question 119

Essay

Table 6.5
$$\begin{array} { | c | c | c | c | c | c | } \hline \begin{array} { c } \text { Number of } \\\text { Workers }\end{array} & \begin{array} { c } \text { Output } \\\text { (boxes) }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Product of } \\\text { Labour }\end{array} & \begin{array} { c } \text { Office } \\\text { Rent } \\\text { (dollars) }\end{array} & \begin{array} { c } \text { Labour } \\\text { Cost } \\\text { (dollars) }\end{array} & \begin{array} { c } \text { Total Cost } \\\text { (dollars) }\end{array} \\\hline 0 & 0 & - - & & & \\\hline 1 & 220 & & 400 & 200 & \\\hline 2 & & 250 & & & 800 \\\hline 3 & 680 & & & & \\\hline 4 & & 160 & & & 1200 \\\hline 5 & 940 & & & 1000 & \\\hline 6 & 980 & & & & 1600 \\\hline\end{array}$$
-Refer to Table 6.5.Suzette's Fancy Packaging subcontracts with Sunshineland Pecans to box dried fruit and nuts for Suzette's mail order business.Suzette rents space for her factory for $400 a week in a nearby strip mall.She can hire temporary workers for $200 a week.Table 6.5 above shows her output and cost data.Use the table to answer questions a-e.
a.Complete the table.
b.In the last week of summer Suzette closes her business to go on a family vacation.What are her costs during that week?
c.In one week Suzette exactly breaks even.If her revenue for the week is $1 200,how many boxes of fruit and nuts did she produce?
d.Judging from the marginal product of labour data,would you say that Suzette had to settle for increasingly unproductive workers? Explain your answer.
e.Suzette has received an order for 1 500 boxes of nuts per week for the next 3 months.If she expects the trend in the marginal product of labour will continue in the same direction,what do you think she should do? Should she not commit until she can move to a larger space or should she just hire more workers? Explain your answer.
__________________________________________________________________________________________________________________________________________________________________________________________

---

Definitions:

Cost Leadership Strategy

A business strategy aiming to achieve the lowest production and operation costs within an industry to offer products or services at a lower price than competitors.

Low-Cost Producer

A company that can produce and sell goods or services at a lower cost than its competitors.

IFAC's Code of Ethics

A set of ethical standards and guidelines developed by the International Federation of Accountants to promote integrity, objectivity, and professionalism among accountants.

Cost-Benefit Analysis

A decision-making process that compares the costs of an action or investment to the benefits derived, to assess its feasibility or value.