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The output of a process is valued at $100 per unit. The cost of labor is $50 per hour. The accounting department provided the following
The output of a process is valued at $100 per unit. The cost of labor is $50 per hour. The accounting department provided the following information about the process for the past two weeks:
| Week 1 | Week 2 |
Units Produced | 1,124 | 981 |
Labor (hours) | 255 | 191 |
Material ($) | 21,041 | 18,364 |
Overhead ($) | 8,992 | 7,848 |
Use the multifactor productivity ratio to see whether recent process improvements had any effect and, if so, how much was the effect.
Has labor productivity changed? Use the labor productivity ratio to support your answer.
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