Productvity Ratio Worksheet - D1 Productivity Ratio...

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D1: Productivity Ratio Worksheet, KRM1-7 Mack’s guitar fabrication shop produces low-cost, highly durable guitars for beginners. Typically, out of the 100 guitars that begin production each month, only 80 percent are considered good enough to sell. The other 20 percent are scrapped due to quality problems that are identified after they have completed the production process. Each guitar sells for $250. Because some of the production process is automated, each guitar only requires 10 labor hours. Each employee works an average 160h ours per month. Labor is paid at $10/hour, materials cost is $40/guitar, and overhead is $4000. a. Calculate the labor and multifactor productivity ratios. b. After some study, the operations manager Darren Funk recommends three options to improve the

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