Guitar fabrication shop produces low? cost

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Reference no: EM131400224

Mack's guitar fabrication shop produces low? cost, highly durable guitars for beginners.? Typically, out of the 100 guitars that begin production each? month, only 82 percent are considered good enough to sell. The other 18 percent are scrapped due to quality problems that are identified after they have completed the production process. Each guitar sells for ?$260. Because some of the production process is? automated, each guitar only requires 10 labor hours. Each employee works an average of 160 hours per month. Labor is paid at ?$11 per? hour, materials cost is ?$40 per? guitar, and overhead is ?$4,200.

a. The labor productivity ratio for? Mack's guitar fabrication shop is ?$ 21.32 per hour. ?(Enter your response rounded to two decimal? places.) The multifactor productivity ratio for? Mack's guitar fabrication shop is 1.1. ?(Enter your response rounded to two decimal? places.)

b. After some? study, the operations manager Darren Funk recommends 3 options to improve the? company's multifactor? productivity: follows?Option ?1: increase the sales price by 13 percent follows?Option ?2: improve quality so that only 13 percent are? defective, or follows?Option ?3: reduce? labor, materials, and overhead costs by 13 percent.

What are the answers to each option in question B is my question

Reference no: EM131400224

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