A Fast Food Stand Has a Thriving Business in Downtown

question 26

Essay

A fast food stand has a thriving business in downtown Portland. They serve 3,500 burgers, 3,000 orders of fries, and 4,000 soft drinks per week. The workers all work 40 hours per week but are idle two percent of the time. The manager wants to try to become more efficient. He has done a time study and found:
$$\begin{array} { l c } \underline{\text { Elements for One Item } }& \underline{\text { Minutes }} \\\text { take arder }& 2 \\\text { time takes kitchen to fill order } & 5 \\ \text { pick up order \& put in bag } & 1 \\\text { take customer's money }& 2 \\\end{array}$$ It takes 1 additional minute per additional item. The average order size is 3 items.
a. What is the average number of orders per week?
b. What is the average cycle time in minutes) per order?
c. What is the labor standard in minutes) per order?
d. How many workers does the manager need per week?

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Definitions:

Net Operating Income

The earnings a business retains following the subtraction of operational costs, not including interest and taxes.

Net Operating Income

The financial gain a company receives from its essential business operations, prior to the removal of interest and tax costs.

Variable Costing

Variable costing is an accounting method that only includes variable production costs (direct materials, direct labor, and variable manufacturing overhead) in the cost of a product.

Net Operating Income

The total profit of a company after all operating expenses are subtracted from total revenues but before deducting taxes and interest.