• • 1.15 A furniture manufacturing company working on a 40-hour week makes 100 chairs. The sales price is €70 each, and the company has the following costs:

◆ Direct materials: €700

◆ Direct labor: €300

◆ Overhead: €500

a) Calculate the productivity of the company.

b) What will be the new productivity if the company decides to make 135 chairs per week?

c) If the company decides to improve productivity through materials costs reduction only, how much must these costs be reduced in order to achieve a 10% increase in total productivity?

d) If the company repeats the same exercise as in part (c), but through labor costs reduction, how much must these costs be reduced in order to achieve a 10% increase in total productivity?