Question

Two types of cars (Deluxe and Limited) were produced by a car manufacturer last year. Quantities sold, price per unit, and labor hours are given below. QUANTITY $/UNIT Deluxe car 4,000 units sold $ 8,000 /car Limited car 6,000 units sold $ 9,500 /car Labor, Deluxe 20,000 hours $ 12 /hour Labor, Limited 30,000 hours $ 14 /hour What is the labor productivity for each car? Provide two sets of figures: units per labor hour, and dollar of output per dollar of labor expense. (Round your answers to 2 decimal places.)

Answer 1

Answer:

Explanation:

From the given information; we have:

                          QUANTITY                         $ / UNIT

Deluxe car        4,000 units sold                  $ 8,000 /car

Limited car       6,000 units sold                   $ 9,500 /car

Labor, Deluxe   20,000 hours                       $ 12 /hour

Labor, Limited    30,000 hours                      $ 14 /hour

The objective is to determine:

                               LABOUR PRODUCTIVITY

                  units per labor hour       dollar of output  per dollar of labor

                                                           expense

Deluxe car

Limited car

Firstly; let's us find the Labor productivity in unit/hour For the two cars;

For Deluxe car;

Labor productivity in unit/hour = Output(units)/Input ( Hours)

Labor productivity in unit/hour =  $\dfrac{4000 \ Units }{20000\ Hour} = 0.20 \ Units/Hour$

For Limited car;

Labor productivity in unit/hour =  $\dfrac{6000 \ Units }{30000\ Hour} = 0.20 \ Units/Hour$

Similarly; Labor productivity in dollar of output  per dollar of labor expense is:

output in dollars/input in dollars

For Deluxe Car;

output in dollars = 4000×8000  = 32000000

input in dollars = 20000×12 = 240000

Labor productivity in dollar of output  per dollar of labor expense is=

output in dollars/input in dollars

Labor productivity in dollar of output  per dollar of labor expense:

$=\dfrac{32000000}{240000} \\ \\ = 133.33$

For Limited Car;

output in dollars = 6000×9500  = 57000000

input in dollars = 30000×14 = 420000

Labor productivity in dollar of output  per dollar of labor expense is=

output in dollars/input in dollars

Labor productivity in dollar of output  per dollar of labor expense:

$=\dfrac{57000000}{420000} \\ \\ = 135.71$

                      LABOUR PRODUCTIVITY:

                     

                  units per labor hour       dollar of output  per dollar of labor

                                                           expense

Deluxe car    0.20                                133.33

Limited car    0.20                                135.71