Question

Libbey hocking is the owner of the hummingbird, an all-organic restaurant featuring fresh salads and a variety of vegetarian entrée dishes. As part of a dining room redesign, she is replacing all of the glassware in her 100-seat restaurant. Libbey would like to purchase 40 dozen glasses. Her glassware vendor has offered her similarly styled glassware at three different quality levels. The highest-quality glassware would cost Libbey $50.00 per dozen. The average life expectancy of these glasses is 1,000 uses before they either break or chip. A lower-priced, mid-quality glass sells for $35.00 per dozen and has an expected life of 750 uses. The least-expensive glasses sell for $26.00 per dozen and have an expected life of 500 uses. Help Libbey get more information to assess her best purchase choice by completing the following product cost comparison worksheet. (Spreadsheet hint: format the "per use cost" column to five decimal places.)

Answer 1

Libbey needs to determine which glassware provides the best value for her restaurant. The cost per use calculation shows that the mid-quality glasses at $35.00 per dozen with a life expectancy of 750 uses offer the lowest cost per use at $0.04667, suggesting they are the most cost-effective option for her needs.

Step-by-step explanation:

The question involves performing a cost analysis on different grades of drinking glass to determine which option offers the best value for an organic restaurant owner. To assess the best purchase choice, one needs to compare the cost per dozen and the expected life of each glassware option. Key details include the fact that the highest-quality glasses cost $50.00 per dozen with an expected life of 1,000 uses, the mid-quality glasses cost $35.00 per dozen with an expected life of 750 uses, and the least-expensive glasses cost $26.00 per dozen with an expected life of 500 uses.

By dividing the cost per dozen by the number of uses, we can calculate the per use cost of each option:

• Highest-quality glasses: $50 / 1,000 uses = $0.05000 per use
• Mid-quality glasses: $35 / 750 uses = $0.04667 per use
• Least-expensive glasses: $26 / 500 uses = $0.05200 per use

Based on the calculation, the mid-quality glasses offer the lowest cost per use, suggesting they may be the most economical option for Libbey's restaurant if the primary concern is cost-effectiveness over time.

Answer 2

Libbey needs to determine which glassware provides the best value for her restaurant. The cost per use calculation shows that the mid-quality glasses at $35.00 per dozen with a life expectancy of 750 uses offer the lowest cost per use at $0.04667, suggesting they are the most cost-effective option for her needs.

Step-by-step explanation:

The question involves performing a cost analysis on different grades of drinking glass to determine which option offers the best value for an organic restaurant owner. To assess the best purchase choice, one needs to compare the cost per dozen and the expected life of each glassware option. Key details include the fact that the highest-quality glasses cost $50.00 per dozen with an expected life of 1,000 uses, the mid-quality glasses cost $35.00 per dozen with an expected life of 750 uses, and the least-expensive glasses cost $26.00 per dozen with an expected life of 500 uses.

By dividing the cost per dozen by the number of uses, we can calculate the per use cost of each option:

• Highest-quality glasses: $50 / 1,000 uses = $0.05000 per use
• Mid-quality glasses: $35 / 750 uses = $0.04667 per use
• Least-expensive glasses: $26 / 500 uses = $0.05200 per use

Based on the calculation, the mid-quality glasses offer the lowest cost per use, suggesting they may be the most economical option for Libbey's restaurant if the primary concern is cost-effectiveness over time.