The manager for a craft brewery has narrowed down the search for a new facility location to two communities: communities in the province of Ontario (Canada) and the state of New York (U.S.A). The plant will produce 70,000 litres of beer per day. The fixed setup costs for both locations are identical.
The Ontario facility can produce 70,000 litres of beer per day. The facility works two 8-hour shifts per day with labour productivity of 18 litres of beer per hour. The facility works 5 days per week. The average wage is CAN$20 per hour. The facility would use 450,000 pounds of malt barely (per day) and can buy barely at CAN$0.10 per pound. Based on location and staffing levels, the facility would be assigned an overhead allocation of CAN$3500 per week
Calculate total labour hours and expenses (in CAN$) per day How many workers per day are employed