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Mike's Guitar Inc. produces low? cost, highly durable guitars for beginners. ?Typically, out of the 100 units that begin production each? month, only 85 percent are considered good enough to sell. The other 15 percent are scrapped due to quality problems that are identified after they have completed the production process. Each guitar sells for ?$270. Because some of the production processes are? automated, each unit only requires 5 labor hours. Labor is paid at ?$12 per?hour, materials cost is ?$40 per? unit, and overhead is ?$11,000.
A) What is the current multifactor productivity ratio? (Enter your response rounded to two decimal places.)
B) What would be the new multifactor productivity ratio if the quality is improved so that only 10% are defective? (Enter your response rounded to two decimal places.)
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You are to summarize in your own words what information does the website provide that could be useful to businesses generally, and/or start-up businesses.
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