Productively measure of units of output per dollar of input

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Reference no: EM132114607

A hamburger factory produces 60,000 hamburgers each weeks. The equipment used cost $10,000 and will remain productive for four years. The labor cost per year is $13,500.

a. What is the productively measure of units of output per dollar of input, averaged over the four-year period ?

b. The company has the option of purchasing equipment for $13,000, with an operating life of five years. It would reduce labor cost to $11,000 per year. Should it consider purchasing this equipment ( using productivity arguments alone ) ?

Reference no: EM132114607

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