A department employs 3 types of workers: laborers earning $5 per hour, machine o

Question

A department employs 3 types of workers: laborers earning $5 per hour, machine operators earning $9 per hour and maintenance workers earning $16 per hour. For a certain job over 2 time periods, the following data were collected:

Type of Employee                                     Number of Labor period #1          Number of Labor for period # 2

Laborer                                                                  20                                                           16

Machine Operator                                                 12                                                            16

Maintenance Worker                                              6                                                              9

Output increased by 20% in period #2 compared to period #1.

a) Compute the Labor productivity ratio for each period.

b) Compute the percent change in the labor ratios.    

Explanation / Answer

Total cost in period 1 = 20*5 + 12*9 +6*16 = 304

Total cost in period 2 = 16*5 + 16*9 +9*16 = 368

Labor ratios for period 2

Laborer = 368/16

machine operator = 368/16

maintinance = 368/9

Labor ratios for period 1

Laborer = 304/20

machine operator = 304/12

maintinance = 304/6

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