Question

8000*800A hamburger factory produces 70,000 hamburgers each week. The equipment used costs $13,000 and will remain productive for three years. The labor cost per year is $10,000.

What is the productivity measure of "units of output per dollar of input" averaged over the three-year period? Assume that there are 52 weeks per year. Round your answer to one decimal place.

Productivity:
hamburgers/dollar

We have the option of $10,000 equipment, with an operating life of two years. It would increase labor costs to $12,000 per year. Should we consider purchasing this equipment (using productivity arguments alone)? Assume that there are 52 weeks per year. Round your answer for productivity to one decimal place.

For the cheap machine, productivity is
hamburgers/dollar input. Because the productivity of the cheap machine is
-Select-
, it would be a
-Select-
investment based on this single criterion.*(0.05-0.75)

Answer 1

The productivity is 253.95 hamburgers/dollar. Please Check the Equations below to help you remember.

Explanation:

First, let's calculate the total number of hamburgers produced over the three-year period. This is 70,000 hamburgers per week times 52 weeks per year times 3 years, which equals 10,920,000 hamburgers.

Next, let's calculate the total cost over the three-year period. This is the cost of the equipment ($13,000) plus the labor cost per year ($10,000) times 3 years, which equals $43,000.

Finally, we can calculate the productivity measure by dividing the total number of hamburgers produced by the total cost. This is 10,920,000 hamburgers divided by $43,000.

Productivity = 10,920,000 / $43,000.

The productivity is 253.95 hamburgers/dollar.