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EzBike puts together bikes with parts they purchase from a variety of suppliers. Recently they purchased some new equipment that reduced the labor needed to

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EzBike puts together bikes with parts they purchase from a variety of suppliers. Recently they purchased some new equipment that reduced the labor needed to put these bikes together. Prior to buying the new equipment the company used 5 workers, who produced an average of 80 bikes per hour. Workers receive $10 per hour, and machine cost was $40 per hour. With the new equipment, it was possible to transfer one of the workers to another department, resulting in equipment cost increasing by $10 per hour, and output increasing by 4 bikes per hour. A. Compute labor productivity under each system. Use bike per worker per hour as the measure of labor productivity. (5 points) B. Compute the multifactor productivity under each system. Use bikes per dollar cost (labor plus equipment) as the measure. ( 5 points) C. Comment on changes in productivity according to the two measures. Was this is good move for the company to add on the new equipment? ( 10 points)

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