Essay Questions
72. The
weekly output of a production process is shown below, together with data for
labor and material inputs. The standard inventory value of the output is $125
per unit. Overhead is charged weekly at the rate of $1500 plus .5 times direct
labor cost. Assume a 40-hour week and an hourly wage of $16. Material cost is
$10 per running foot. What is the average multi-factor productivity for this
process?
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73. A
company has introduced a process improvement that reduces processing time for
each unit, so that output is increased by 25% with less material, but one
additional worker required. Under the old process, five workers could produce
60 units per hour. Labor costs are $12/hour, and material input was previously
$16/unit. For the new process, material is now $10/unit. Overhead is charged at
1.6 times direct labor cost. Finished units sell for $31 each. What increase in
productivity is associated with the process improvement?
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