Question

Now consider the 10,00 masks still in ending work in process. They are only 25% of the way through shaping process.

Direct materials are added at the beginning of the shaping process.

Answer 1

The question is about production efficiency and economies of scale, using the example of labor allocation between the manufacture of shoes and refrigerators to explain how the number of workers affects total product output.

Step-by-step explanation:

The question you are asking relates to the concept of production efficiency in the context of labor allocation between different products, such as shoes and refrigerators.

The example given demonstrates how the number of workers impacts the total output of products. If 40 workers in the United States are solely dedicated to making shoes, and it takes four workers to produce 1,000 shoes, then 40 workers would produce 10,000 shoes.

Similarly, if 40 workers focus on making refrigerators, with each worker being able to produce 1,000 units, the total production would be 40,000 refrigerators.

This illustrates the principle of linear production, where the output is directly proportional to the number of workers, assuming all other factors remain constant. The concept also touches on the idea of economies of scale, where the cost of production can decrease as the scale of production increases.

An example of this can be seen in the chemical industry, where costs do not rise proportionately with the increase in production volume, commonly referred to by the 'six-tenths rule'.