Reference no: EM133671472
A company that makes shopping carts for supermarkets recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts.
Prior to buying the new equipment, the company used five workers, who produced an average of 80 carts per hour. Workers receive $10 per hour, and machine cost was $40 per hour.
With the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $10 per hour while output increased by four carts per hour.
1.Compute labor productivity under old system. Use carts per worker per hour as the measure of labor productivity.
2.Compute labor productivity under new system. Use carts per worker per hour as the measure of labor productivity.
3.Compute the multifactor productivity under old system. Use carts per dollar cost (labor plus equipment) as the measure.
4.Compute the multifactor productivity under new system. Use carts per dollar cost (labor plus equipment) as the measure.