Problem 2-17 Two types of cars (Deluxe and Limited) were produced by a car manuf

Question

Problem 2-17

Two types of cars (Deluxe and Limited) were produced by a car manufacturer last year. Quantities sold, price per unit, and labor hours follow.

What is the labor productivity for each car? Provide two sets of figures: units per labor hour, and dollar of output per dollar of labor expense. (Round your answers to 2 decimal places.)

Labor Productivity

Two types of cars (Deluxe and Limited) were produced by a car manufacturer last year. Quantities sold, price per unit, and labor hours follow.

Explanation / Answer

For Deluxe car:

Labor productivity (units/ hour) = 2850/21750 = .13 units per labor hour

Labor productivity (Dollars) = 2850*8700/(21750*11) = $103.64 output / dollar of labor expenses

For Limited car:

Labor productivity (units/ hour) = 6350/29555 = .21 units per labor hour

Labor productivity (Dollars) = 6350*10200/(29555*14) = $ 156.54 output / dollar of labor expenses

Now, following matrix is prepared on the basis of above calculation.

Labor Productivity

   units/hour

    dollars

  Deluxe car

.13    

$103.64   

  Limited car

.21    

$156.54    

Labor Productivity

   units/hour

    dollars

  Deluxe car

.13    

$103.64   

  Limited car

.21    

$156.54    

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