A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used 5 workers. who together produced an average of 60 carts per hour. Workers receive $13 per hour, and machine cost was $40 per hour. With the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $12 per hour. while output increased by 6 carts per hour. a. Compute labor productivity under each system. Use carts per worker per hour as the measure of labor productivity. (Round your answers to 3 decimal places.)

A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used 5 workers. who together produced an average of 60 carts per hour. Workers receive $13 per hour, and machine cost was $40 per hour. With the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $12 per hour. while output increased by 6 carts per hour. a. Compute labor productivity under each system. Use carts per worker per hour as the measure of labor productivity. (Round your answers to 3 decimal places.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the
labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used 5 workers.
who together produced an average of 60 carts per hour. Workers receive $13 per hour, and machine cost was $40 per hour. With the
new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $12 per hour.
while output increased by 6 carts per hour.
a. Compute labor productivity under each system. Use carts per worker per hour as the measure of labor productivity. (Round your
answers to 3 decimal places.)
Before
After
b. Compute the multifactor productivity under each system. Use carts per dollar cost (labor plus equipment) as the measure. (Round
your answers to 3 decimal places.)
Before
After
carts per worker per hour
carts per worker per hour
Labor productivity
Multifactor productivity
carts/dollar cost
carts/dollar cost
c. Comment on the changes in productivity according to the two measures. (Round your Intermediate calculations to 3 decimal
places and final answers to 2 decimal places.)
by
by
196
199

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