CH_02_10th_Edition

# CH_02_10th_Edition - Competitiveness Strategy and...

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Competitiveness, Strategy, and Productivity CHAPTER 2 COMPETITIVENESS, STRATEGY, AND PRODUCTIVITY PROBLEMS P1. The Cool-Tech Company produces various types of fans. In May, the company produced 1,728 window fans at a standard price of \$40.00. The company has 12 direct labor employees. During May, window fans were produced on 9 working days (of 8 hours each), and other products were produced on other days. Determine the labor productivity of the window fans. P2. The Cool-Tech Company (see P1) also produces desk fans at a standard price of \$25.00. During May, 1,872 desk fans were produced on 11 working days (of 8 hours each). On one day, two employees called in sick. a. Determine the labor productivity of the desk fans. b. Was productivity higher for the window fans or for the desk fans in May? P3. Here is additional information about the Cool-Tech Company (see P1 & P2). There were 20 working days in May, during which the compensation for a Cool-Tech direct labor employee (including wages and fringe benefits) amounted to \$21.00 per hour. The direct material cost of window fans is \$7.00; the direct material cost of desk fans is \$5.00. The annual overhead expense incurred in operating the factory is \$600 per working day. a. Determine the multi-factor productivity of the Cool-Tech Company in May. b. What is the interpretation of the multi-factor productivity? P4. In June, the Cool-Tech Company produced 1,730 window fans (see P1) in 10 working days. No employees were absent during that time period. What was the percentage change in labor productivity of window fans from May? 1

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Competitiveness, Strategy, and Productivity PROBLEM SOLVING TIPS 1. Beware the difference between partial and multi-factor productivity measures. Partial productivity measures compare a single type of output to a single type of input. Problems P1 and P2 ask
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CH_02_10th_Edition - Competitiveness Strategy and...

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