Q1: A company has introduced a process improvement that reduces processing time for each unit, but one additional work is required. Under the old process, five workers could produce 60 units per hour. Labor costs are $12/hour, and material input was previously $16/unit. For the new process, the material is now $10/unit. Overhead is charged at 1.6 times direct labor cost. Finished units sell for $31 each. Six workers could produce 80 units per hour. What is productivity growth associated with process improvement?

Old Process New Process Output 60 80 Price 31 31 Workers 5 5 6 Labor Cost 12 12 Material 16 10 Overhead cost 1.6 1.6