d. What is the percentage change in efficiency of all single and multifactor productivity? e. Do you suggest to redesign the process? Justify your decision.

Marketing
20th Edition
ISBN:9780357033791
Author:Pride, William M
Publisher:Pride, William M
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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Question 2:
Spirit Contracting company is taking a decision to redesign their process of production. You are
given an opportunity to support the company in deciding the process redesigning based on
productivity and efficiency. Based on the information provided below, you are supposed to give
your recommendation based on efficiency.
No. of chairs produced
Total Labor Hours
Direct Material
Energy (kilowatt-hours)
Overhead
Old Process
200
80
$5,000
5,000
$4,800
New Process
250
80
$5,000
4,500
$5,200
Costs
e. Do you suggest to redesign the process? Justify your decision.
$ 20 per hour
$ 1.75 per kilowatt-hour
d. What is the percentage change in efficiency of all single and multifactor productivity?
Transcribed Image Text:Question 2: Spirit Contracting company is taking a decision to redesign their process of production. You are given an opportunity to support the company in deciding the process redesigning based on productivity and efficiency. Based on the information provided below, you are supposed to give your recommendation based on efficiency. No. of chairs produced Total Labor Hours Direct Material Energy (kilowatt-hours) Overhead Old Process 200 80 $5,000 5,000 $4,800 New Process 250 80 $5,000 4,500 $5,200 Costs e. Do you suggest to redesign the process? Justify your decision. $ 20 per hour $ 1.75 per kilowatt-hour d. What is the percentage change in efficiency of all single and multifactor productivity?
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