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Last week employees at Bluegill produced 46 chairs after working a total of 200 hours.
Of the 46 chairs produced, 12 were damaged due to a problem with the new sanding machine.
The damaged chairs can be discounted and sold for $25 each.
The undamaged chairs are sold to a department store retail chain for $70 each.
(a) What was the labor productivity ratio for last week?
(b) If labor productivity was $15 in sales per hour the previous week,
what was the change in labor productivity?
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(a) To answer question (a), calculate the total sales revenue
12*25 + (46-12)*70 = 2680 dollars
and then divide it by the elapsed time. You will get the answer
the labor productivity ratio for last week = = = 13.40 dollars. ANSWER
(b) If the labor productivity was $15 per hour the previous week,
it means that the it decreased from $15.00 the previous week to 13.40 last week,
and the decrease of labor productivity was 15.00 - 13.40 = 1.60 dollars per hour. ANSWER
Solved.