Question

Two types of cars (Deluxe and Limited) were produced by a car manufacturer last year. Quantities sold, price per unit, and labor hours are given below. QUANTITY $/UNIT Deluxe car 4,000 units sold $ 8,000 /car Limited car 6,000 units sold $ 9,500 /car Labor, Deluxe 20,000 hours $ 12 /hour Labor, Limited 30,000 hours $ 14 /hour What is the labor productivity for each car? Provide two sets of figures: units per labor hour, and dollar of output per dollar of labor expense. (Round your answers to 2 decimal places.)

Answer 1

Step-by-step explanation:

From the given information; we have:

QUANTITY $ / UNIT

Deluxe car 4,000 units sold $ 8,000 /car

Limited car 6,000 units sold $ 9,500 /car

Labor, Deluxe 20,000 hours $ 12 /hour

Labor, Limited 30,000 hours $ 14 /hour

The objective is to determine:

LABOUR PRODUCTIVITY

units per labor hour dollar of output per dollar of labor

expense

Deluxe car

Limited car

Firstly; let's us find the Labor productivity in unit/hour For the two cars;

For Deluxe car;

Labor productivity in unit/hour = Output(units)/Input ( Hours)

Labor productivity in unit/hour =
`(4000 \ Units )/(20000\ Hour) = 0.20 \ Units/Hour`

For Limited car;

Labor productivity in unit/hour =
`(6000 \ Units )/(30000\ Hour) = 0.20 \ Units/Hour`

Similarly; Labor productivity in dollar of output per dollar of labor expense is:

output in dollars/input in dollars

For Deluxe Car;

output in dollars = 4000×8000 = 32000000

input in dollars = 20000×12 = 240000

Labor productivity in dollar of output per dollar of labor expense is=

output in dollars/input in dollars

Labor productivity in dollar of output per dollar of labor expense:

`=(32000000)/(240000) \\ \\ = 133.33`

For Limited Car;

output in dollars = 6000×9500 = 57000000

input in dollars = 30000×14 = 420000

Labor productivity in dollar of output per dollar of labor expense is=

output in dollars/input in dollars

Labor productivity in dollar of output per dollar of labor expense:

`=(57000000)/(420000) \\ \\ = 135.71`

LABOUR PRODUCTIVITY:

units per labor hour dollar of output per dollar of labor

expense

Deluxe car 0.20 133.33

Limited car 0.20 135.71