Question

A work group of 10 workers in a certain month produced 7200 units of output working 8 hr/day for 22 days in the month. Determine the labor productivity ratio using (a) units of output per worker-hour and (b) units of output per worker-month. (c) Suppose that in the next month, the same work group produced 6800 units, but there were only 20 workdays in the month. For each productivity measure in (a) and (b), determine the productivity index for the next month using the prior month as a base.

A) (a) 3.27 units/hr, 327 units/month; (b) 3.27 units/hr, 327 units/month
B) (a) 4.09 units/hr, 409 units/month; (b) 3.27 units/hr, 327 units/month
C) (a) 3.27 units/hr, 327 units/month; (b) 4.09 units/hr, 409 units/month
D) (a) 4.09 units/hr, 409 units/month; (b) 4.09 units/hr, 409 units/month

Answer 1

To calculate the labor productivity ratio, divide the total number of units produced by the total number of worker-hours. To calculate the units of output per worker-month, multiply the units of output per worker-hour by the total number of hourly workdays in a month. The productivity index for the next month can be calculated using the same formulas.

Step-by-step explanation:

In order to calculate the labor productivity ratio, we need to determine the units of output per worker-hour and per worker-month.

To calculate the units of output per worker-hour, divide the total number of units produced (7200) by the total number of worker-hours (10 workers x 8 hours/day x 22 days/month = 1760 hours). The labor productivity ratio is 7200 units / 1760 hours = 4.09 units/hr.

To calculate the units of output per worker-month, multiply the units of output per worker-hour (4.09 units/hr) by the total number of hourly workdays in a month (8 hours/day x 22 days/month = 176 hours). The labor productivity ratio is 4.09 units/hr x 176 hours = 720 units/month.

For the next month, with 20 workdays and 6800 units produced, we can use the same calculations to determine the productivity index:

(a) Units of output per worker-hour: 6800 units / (10 workers x 8 hours/day x 20 days/month) = 3.27 units/hr

(b) Units of output per worker-month: 3.27 units/hr x (8 hours/day x 20 days/month) = 654 units/month