Question
A hamburger factory produces 65,000 hamburgers each week. The equipment used costs $15,000 and will remain productive for four years. The labor cost per year
A hamburger factory produces 65,000 hamburgers each week. The equipment used costs $15,000 and will remain productive for four years. The labor cost per year is $13,000.
What is the productivity measure of "units of output per dollar of input" averaged over the four-year period? Assume that there are 52 weeks per year. Round your answer to one decimal place.
Productivity: hamburgers/dollar
We have the option of $18,500 equipment, with an operating life of five years. It would reduce labor costs to $11,000 per year. Should we consider purchasing this equipment (using productivity arguments alone)? Assume that there are 52 weeks per year. Round your answer for productivity to one decimal place.
For the expensive machine, productivity is hamburgers/dollar input. Because the productivity of the expensive machine is -Select-higherlowerItem 3 , it would be a -Select-goodbadItem 4 investment based on this single criterion.
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