Operation Management

Business & Finance
Tutor: None Selected Time limit: 1 Day

A company offers ID theft protection using leads obtained from client banks. Three employees work 40 hours a week on the leads, at a pay rate of $25 per hour per employee. Each employee identifies an average of 3,200 potential leads a week from a list of 5,100. An average of 6 percent of potential leads actually sign up for the service, paying a one-time fee of $75. Material costs are $1,400 per week, and overhead costs are $8,000 per week

.

   

May 19th, 2015

Hey let me know if you have any questions.  You didn't actually state the question, but I'm going to assume that they're looking for the net profit.

Net profit = income - expenses

Income:

(3 employees) * (40hrs/week) * ($25/hour/employee) = $3000/week

(3,200 leads/employee/week) * (3 employees) * (.06 of leads) * ($75 one time fee/lead) = $43,200/week

Expenses: 

($1,400 material costs) + ($8,000 overhead costs) = $9,400 expenses per week

Net profit = ($3000+$43200) - $9400

Net profit = $36,800/week

Let me know if you were looking for a different answer :)



May 19th, 2015

Did you know? You can earn $20 for every friend you invite to Studypool!
Click here to
Refer a Friend
...
May 19th, 2015
...
May 19th, 2015
Dec 10th, 2016
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer