Table 1.3 The Abco Company Manufactures Electrical Assemblies.The Current Process Uses 10

Essay

Table 1.3
The Abco Company manufactures electrical assemblies.The current process uses 10 workers and produces 200 units per hour.You are considering changing the process with new assembly methods that increase output to 300 units per hour,but will require 14 workers.Particulars are as follows:
Workers are paid at a rate of $10 per hour,and overhead is charged at 140% (or 1.4 times)labor costs.Finished switches sell for $20/unit.
a.Calculate the multifactor productivity for the current process.
b.Calculate the multifactor productivity for the new process.
c.Determine if the new process should be implemented.
-The three-person crew worked their way through the neighborhood,testing doorknobs and windows and slipping past security systems like a team of ninjas.Of course,they weren't ninjas,but a crew of brazen burglars,hoping to grab cash and other valuables to fence at the next level of their supply chain.Fortune smiles on them on this day in the prestigious Edmond Oaks neighborhood.A lawn maintenance crew is creating a tremendous racket mowing and edging lawns,which completely drowns out the sounds of breaking glass.Details of the day's haul appear in Table C.
a.What is the multifactor productivity?
b.What is the labor productivity?
Table C: The Haul
Workers are paid at a flat rate of 20% of the sales price of the merchandise.Materials cost represents the cost of gasoline and surgical gloves,and overhead is 20% of the sales price of the merchandise.