Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Please answer your own and not something already posted Problem 5: Underground Tutoring (4+4+6+6=20 pts) Charles runs an underground tutoring service, offering the writing of

image text in transcribed

image text in transcribedPlease answer your own and not something already posted

Problem 5: Underground Tutoring (4+4+6+6=20 pts) Charles runs an underground tutoring service, offering the writing of essay papers for students. He has hired 12 nerds to write papers for the clients he accumulates through word of mouth. Each nerd has the time to write 2 papers including a bibliography for each, per week. The flow unit is the essay. The process consists of a client ordering, consulting with his or her assigned nerd for the writing of the essay, waiting for paper, and then receiving the completed paper. On average, ordering a paper and receiving the paper is negligible. Consultation usually takes 45 minutes and it takes a nerd 2 hours to write a paper. If a student wants his or her bibliography written, it takes a nerd an additional 25 minutes, and has a contribution margin of $10. The average essay generates a contribution margin of $50 for Charles, and Charles hires a nerd for $8/ hour. a. If all clients want a paper including a bibliography, what is the capacity rate (paper per hour) of Underground Tutoring? Assume the due date for a paper is 1 week long. b. At what rate ( $ /hour) is margin generated by Underground Tutoring if it is operating at capacity? c. Assume that Charles establishes a subsidiary just for the bibliography work, supervised by his younger brother Ted and his team of "tutorers" from another school. Ted charges the same rate as Charles and has 16 employees working under him, who each have the time to write 2 bibliographies/week. Charles requests that for all those that want bibliographies done, to go immediately to Ted's Tutoring to pick up the finished papers. Assuming that all clients want both paper and bibliography, what is the capacity rate(papers/hour) of the total system (Charles and Ted)? d. Following the assumptions given in c, at what rate ( $/ hour) is margin generated by the system if it is operating at capacity

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Income Tax Fundamentals 2013

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

31st Edition

9781285586618

Students also viewed these Accounting questions