229k views
2 votes
What is the hourly compensation per worker for a company with a unit labor cost of 0.9 and an hourly output per worker of $32.50? round your answer if necessary to the nearest whole number

1 Answer

1 vote

Given Information:

Unit labor cost = 0.9

Hourly output per worker = $32.50

Required Information:

Hourly compensation per worker = ?

Answer:

Hourly compensation per worker = $36

Explanation:

The unit labor cost is given by


U = (O)/(W)

Where W is the hourly compensation per worker, O is the hourly output per worker and U is the unit labor cost.

Re-arranging for the hourly compensation yields,


U = (O)/(W)\\\\W =(O)/(U)\\ \\

Now substitute the given values


W =(32.50)/(0.9)\\\\W = 36.11\\\\W = \$ 36

Therefore, the hourly compensation per worker is $36.

Bonus:

Unit labor cost is the amount incurred with regard to labor expenses to produce one unit of a product. Calculating the unit labor cost helps in analyzing other aspects of the business such as product pricing, profit margin, sales etc.

User Tlaquetzal
by
7.8k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories