A manufacturing company pays its employees a constant salary for working 35 hours each week.

The production process is highly specialised and the quality of output is a critical factor. All completed units are inspected. Currently about 10% of output fails to meet the expected specification.

The managing director has forecast increasing sales and is keen to reduce the labour cost per unit of production. He has suggested three possible ways of achieving this:

1 improve direct labour productivity 

2 increase the number of hours worked 

3 reduce the rate of rejections 

Which of the above suggestions would enable the company to reduce the labour cost per unit?

A Suggestion 2 only.

B Suggestions 1 and 2 only.

C Suggestions 1 and 3 only.

D Suggestions 2 and 3 only.