Mr. K’s is a very popular hair salon. It offers high-quality hairstyling and physical relaxation services at a reasonable price, so it always has unlimited demand. The service process includes five activities that are conducted in the sequence described below. (The time required for each activity is shown in parenthesis):
Activity 1: Welcome a guest and offer homemade herb tea. (12 minutes)
Activity 2: Wash and condition hair. (15 minutes)
Activity 3: Neck, shoulder, and back stress release massage. (14 minutes)
Activity 4: Design the hairstyle and do the hair. (24 minutes)
Activity 5: Check out the guest. (8 minutes)
Three servers (S1, S2, and S3) offer the services in a worker-paced line.
The assignment of tasks to servers is the following: S1 does Activity 1. S2 does activities 2 and 3. S3 does activities 4 and 5.Instruction: Do not round your intermediate calculations. Round average labor utilization to 2 decimal places and all direct labor costs to 2 decimal places.
a. What is the labor content?minutes per customer
b. What is the average labor utilization?percent
c. At a wage rate of $20 per hour, what is the cost of direct labor per customer?per customer
d. Mr. K. considers hiring a new employee to help any one (and only one) of the servers without changing the tasks performed by each server. What would the new direct labor cost be? per customer
e. Mr. K also contemplates redesigning the assignment of tasks to servers. For this, Mr. K is evaluating the reassignment of Activity 5 from S3 to S1. What would the new direct labor cost be?per customer.