Decision making alternatives Elmer Buckner is retired and receives $450 per month in Social Security benefits. His house is paid for but he needs additional income to make ends meet. Fortunately, Mr. Buckner learned to bake pies when he was growing up. He also baked pies during his brief tour of duty in the armed forces. He supplements his income by baking delicious home-made pies and sells them for $3.00 each. Mr. Buckner spends about 60 hours per month on pie-baking and feels that this is as much as he wants to work. Although he sells 300 pies per month, he would like to earn more money. Recently, Mr. Buckner's church offered to hire him for 40 hours per month at $6.00 per hour to maintain church records. If he takes the job Mr. Buckner feels he would have to give up baking pies, and is reluctant to do without the pie income. A friend suggests that he should keep good records of his baking expenses to determine how much he earns. In a month of record keeping Mr. Buckner collects the following data which he feels represent an average month for him:

About 20 percent of the grocery bills represents items consumed by Mr. Buckner, and the rest consists of pie ingredients and supplies. He estimates that his utility bill would be only $90 if he did not bake pies. About half of the gasoline and maintenance costs can be attributed to his baking activities. The miscellaneous items are all personal.

REQUIRED Evaluate Mr. Buckner's pie-baking business by concentrating only on the financial dimensions. Ignoring qualitative issues such as how good he might feel working in his church, advise Mr. Buckner if he should continue to bake or accept the church job.

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Grocery store receipts ... Utilities.... Gasoline.... Car repairs, maintenance, and supplies Miscellaneous expenses $1,000 110 45 35 225