Question: A factory employs 5 0 workers, each paid a basic hourly rate of R 5 5 . 0 0 for a 3 5 - hour
A factory employs workers, each paid a basic hourly rate of R for a hour working week. Overtime is paid at R per hour. It takes each employee hours to produce one unit of the sole product. On average, employees work hours of overtime per week.
Management is considering automating part of the production process, which will reduce the unit production time by minutes. It is expected that with the new system, overtime will no longer be required.
REQUIRED:
What would be the effect of the new system on the labour cost per unit?
A R increase
B R decrease
C R decrease
D R increase
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