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The output of a process is valued at $100 per unit. The cost of labor is $50 per hour including benefits. The accounting department provided
The output of a process is valued at $100 per unit. The cost of labor is $50 per hour including benefits. The accounting department provided the following information about the process for the past four weeks:
Week 1 | Week 2 | Week 3 | Week 4 | |
Units produced | 1,124 | 1,310 | 1,092 | 981 |
Labor ($) | 12,735 | 14,842 | 10,603 | 9,526 |
Material ($) | 21,041 | 24,523 | 20,442 | 18,364 |
Overhead ($) | 8,992 | 10,480 | 8,736 | 7,848 |
- Use the multifactor productivity ratio to see whether recent process improvements had any effect and, if so, when the effect was noticeable.
- Has labor productivity changed? Use the labor productivity ratio to support your answer.
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