Increase in productivity associated with process improvement

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Reference no: EM131799260

Question: A company has introduced a process improvement that reduces processing time for each unit, so that output is increased by 50% with less material, but one additional worker required. Under the old process, 7 workers could produce 60 units per hour. Labor costs are $12/hour, and material input was previously $20/unit. For the new process, material is now $ 14/unit. Overhead is charged at 1.8 times direct labor cost. Finished units sell for $37 each.

Answer each of the following questions:

1. Before the Process Improvement, the Multifactor Productivity?

2. After the Process Improvement, the Multifactor Productivity?

3. The increase in productivity associated with the process improvement?

Reference no: EM131799260

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