Victoria Hair Salon styles hair in three operationswashing, cutting/setting, and dryingand charges $25 per styling. (Each styling
Question:
Each hair styling has variable costs of $10. Victorias output is constrained by the 96 units of cutting/setting capacity. Two options exist that can relieve the bottleneck at the cutting/ setting operation. Consider the differential costs associated with each of the following options to determine the impact on throughput.
Option a. Victoria can increase bottleneck output by hiring one nonstylist employee to prepare customers for the cutting/setting by washing and combing their hair. This would increase the cutting/setting capacity to 120 each Saturday. The cost for this additional employee is $100 per Saturday.
Option b. Victoria could hire another stylist for each Saturday, increasing the cutting/ setting capacity to 108 each Saturday and costing an additional $200 per Saturday.
Should Victorias owner go ahead with either of the two options? Why or whynot?
Step by Step Answer:
Managerial Accounting An Introduction to Concepts Methods and Uses
ISBN: 978-0324639766
10th Edition
Authors: Michael W. Maher, Clyde P. Stickney, Roman L. Weil