Ruiz Restaurant provides French cuisine dining at a popular tourist destination on the north coast of New South Wales. The business has been doing well lately and the number of tourists dining in each evening has increased by 25 percent compared to the previous year. Ruiz Restaurant is trying to decide whether to employ a new full-time staff chef or whether to use casual staff paid by the hour to cover the increased demand for its meals. The costs of employing a new chef are shown below.

A casual chef works 6 hours per day for 6 days per week from Tuesday to Sunday. The casual chef receives 25 percent extra for working on a Saturday and 50 percent extra for working on a Sunday.
Required Calculate whether it is more cost-effective to employ a new permanent chef or to employ casual staff on an hourly basis. What factors, other than costs, should be taken into consideration in making the final decision?

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Direct salary $92 000 Direct on-costs Fixed cost of uniforms, training and food Total costs Cost per hour for casual staff 27 600 12 000 $ 131 600 $52