How much is that gift in the window?

Boss Jim is very frugal.  He watches every penny that comes and goes in his company.

So, with the downturn in the economy, Boss Jim decided that the $60.00 he was spending for a gift from his local gift basket guy was too much.  “My assistant Jane can do that, for much less!”  So the next time Boss Jim needed to send a gift to one of his customers, he told Jane to get it done.  Jane got in her car and headed off to the local big box store, picked up a bunch of items, brought them back to the office and put her gift together.  Next, she headed over to Ship Stuff Here, had the gift boxed up and shipped.  This whole process took a modest 4 hours out of her day.

When she got back to the office, however, she realized that the work she should have been doing during that 4 hours was sitting on her desk waiting for her.  Unfortunately, Jane ended up staying 2 hours after work trying to catch up.

The next day, Boss Jim called her into his office and asked, “How much did you spend on our customers’ gift?”  Jane looked at her receipts and proudly replied that it totaled only $43.25.  Wow, thought Boss Jim.  I saved $16.75 on that gift.  It was a good decision to start doing this in office.

But, did he save at all.  Turns out that Boss Jim wasn’t looking at the whole picture.

It’s true that the gift and shipping only cost $43.25.  But was that the only cost?  There is the issue of Jane’s 4 hours at $10.00 per hour, and the 2 hours of time-and-a-half, for a grand total for the gift of $113.25.

Hhmmm.  One gift for the price of two.  Boss Jim could have been far more frugal by sticking with the local gift guy, couldn’t he?

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