A company has introduced a process improvement that reduces processing time for each unit, so that output , which had been at 80 units per hour, increases by 25%. The cost for material per units of output has dropped from $20 per unit of output to $10 per unit of output. Labor costs have remained constant at $15 per worker per hour. However, the new process requires seven workers, which two more than needed previously. Overhead is charged 1.6 times direct labor cost. Finished units sell for $40 each.

A.) What is the labor productivity (in units/worker/hour) after the process improvement?

B.) What is the multi factor productivity (in dollars of output per dollars of input) after the process improvement?

Airphone, Inc, manufactures cellular telephones at a processing cost of $57 per unit. The company produces an average of 230 phones per week and has a yield of 89% good-quality phones, resulting in 11% defective phones, all which can be reworked The cost of reworking a defective telephone is $15

A.) Compute the QPR

B.) Compute the QPR if the company increased the production rate to 330 phones per week while reducing the processing cost of $45, reducing the rework cost to $10, and increasing the product yield of good-quality telephone to 95%.