A garment manufacturer produces various types of casual wears, including T-shirts, trousers, and shorts. The company has 24 direct labour employees. All 24 employees are skilled workers to produce all three products. An employee who produced T-shirt received $60 per hour, an employee who produced trousers received $100 per hour, and an employee who produced shorts received $50 per hour.

In addition, the direct material cost of T-shirt is $100 per unit; the direct material cost of trousers is $200 per unit, and the direct material cost of shorts is $30 per unit. The annual overhead expense incurred in operating the production plant is $5; 000 per working day.

In June, the company produced 600 T-shirts at $250 per unit, 1,000 trousers at $750 per unit, and 2,000 shorts at $100 per unit. There were 26 working days in June, during which T-shirts were produced in 9 working days (of 10 hours each), trousers in 10 days, and shorts in 7 days.

1. Determine the labour productivity of the company in June. [5 marks]

2. Determine the multi-factor productivity of the company in June. [7 marks]

3. What is the interpretation of the multi-factor productivity? [3 marks]

Answer rating: 100% (QA)

T shirt Trousers Shorts L Labor rate Hr 60 100 50 D DM cos... View the full answer