Question

Lillian Fok is president of Lakefront Manufacturing, a producer of bicycle tires. Fok makes 1,000 tires per day with the following resources:

Labor: 400 hours per day dollar 12.00 per hour
Raw Material: 21,000 pounds per day dollar 1.00 per pound
Energy: dollar 5,000 per day
Capital: dollar 10, 000 per day
Labor productivity per labor hour for these tires = 2.5 tires/labor hour (round your response to two decimal places).

Answer 1

Labor productivity is 2.5 tires per labor hour.

Step-by-step explanation:

Labor productivity can be defined as the amount of output produced per unit of labor input. In this case, the labor productivity for the production of bicycle tires is 2.5 tires per labor hour. This means that for every hour of labor, the company is able to produce 2.5 tires.

To calculate labor productivity, we divide the total number of tires produced (1,000) by the total number of labor hours (400): 1,000 / 400 = 2.5 tires per labor hour.