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Should they extend the operation hour

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Question - A cyber cafe currently operating from 11am to 8pm daily. The supervisor is trying to determine whether they should extend the closing time from 8pm to 12 midnight. He estimates that the revenue will increase by RM250 per hour if he extends hours. However, he will have to pay a part-time worker for 4 additional hours at RM20/hour. Additional miscellaneous costs of RM500 will be incurred and utility costs will be increased by RM15 per hour.

a) Should they extend the hours?

b) Based on the above calculation, should they extend the operation hour for another 3 hours until 3 a.m? The similar incremental cost will occur.

Reference no: EM132600694

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