Joes Electrical 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 shown in the table below: Current ProcessNew ProcessOutput (Units/Hour)200300Number of Workers1014Material Cost/Hour$120$150 Calculate the labour productivity for both processes.Calculate the multifactor productivity for the current process.Calculate the multifactor productivity for the new process.Determine if the new process should be implemented.

Productivity is a mathematical relationship between output produced by a firm through employment of…

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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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Joes Electrical 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 shown in the table below:

	Current Process	New Process
Output (Units/Hour)	200	300
Number of Workers	10	14
Material Cost/Hour	$120	$150

Calculate the labour productivity for both processes.
Calculate the multifactor productivity for the current process.
Calculate the multifactor productivity for the new process.
Determine if the new process should be implemented.

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