Taco casa is considering installing touch screen terminals for patrons to place their food orders. a terminal can typically accommodate the placement of 15 orders each hour while a human can process 20 orders each hour. if employee costs are $7.50/hour in wages and $4.50/hour in taxes, benefits and insurance, what is the per order opportunity cost of a touch screen?

$0.8

Explanation:

Data provided in the question:

Number of orders each hour = 15

Number of orders processed each hour = 20

Wages = $7.50/hr

Taxes = $4.50/hr

Now,

Total cost per hour = $7.50 + $4.50 = $12

Therefore,

By installing touch screen, Taco Casa can save $12 per hour

but touch screen can accommodate only 15 orders

Thus,

Per order opportunity cost of a touch screen

= Total amount saved ÷ Number of Orders accommodated by touch screen

= $12 ÷ 15

= $0.8

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