WimCo Mfg produces cogdarts at several plants. The cogdart sells for $24.00 per
ID: 2459035 • Letter: W
Question
WimCo Mfg produces cogdarts at several plants. The cogdart sells for $24.00 per unit. Plant A produces 800 units per hour. The plants works an eight (8) hour shift five (5) days per week. There are four (4) workers assigned to the production line. The average hourly rate per worker is $18.00. Each cogdart takes 2.25 pounds of material and the price per pound for the material is $2.80. Overhead is $5,246.00 per day. The defect rate for the Plant A production is 3%. The production process results in a byproduct that sells for $.75 per pound. The byproduct is part of the cogdart production revenue and the byproduct output is equivalent to 15% of the total production raw materials.
Plant B produces 950 units per hour. The cogdart sells for $24.00 per unit. The plants works an eight (8) hour shift five (5) days per week. There are two (2) workers assigned to the production line. The average hourly rate per worker is $21.50. Each cogdart takes 2.25 pounds of material and the price per pound for the material is $2.80. Overhead is $7,232.00 per day. The defect rate for the Plant B production is 2.25%. The production process results in a byproduct that sells for $.75 per pound. The byproduct is part of the cogdart production revenue and the byproduct output is equivalent to 15% of the total production raw materials.
What is the productivity difference between Plant A and Plant B? (Compute and round to 4-decimal places).
Explanation / Answer
On the labor point, the Product B is more productive to Product A. Also, the defects in Product B is less @ 2.25% than Product A at 3%.
But on overheads and profit per unit Product A is seem to be more productive to Product B as Profit per higher by 14 cents with Product A.
Raw Material productivity is the same for both the Products line.
Product A Total A $ Product B Total B $ Sales 7200 *24 172800 7600 * 24 182400 By product 2430 * 0.75 1822.5 2565 * 0.75 1923.75 Expenses: Material 16200 * 2.8 45360 17100 * 2.8 47880 Labor 32 hrs * 18 576 16 hrs * 21.5 344 Overheads 5246 per day 5246 7232 per day 7232 Add: defect 216 units 1536 171 units 1247 52718 56703 Profit 16.93 per unit 121904.50 16.79 per unit 127620.25 Productivity Differentiation Labor Units per hour 225 475 Profit per hour $3809.5 $7976 defects 3% 2.25% Overheads $0.73 $0.73 / unit $0.95 / unit Profit / unit $16.93 $16.79Related Questions
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