A furniture manufacturing company working on a 40 hours/week basis makes 100 chairs. The sales price...

 

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A furniture manufacturing company working on a 40 hours/week basis makes 100 chairs. The sales price is RM70/each and the company has the following costs: Direct materials = RM700 Direct labor = RM300 Overhead = RM500 a) Calculate the productivity of the company. (10 marks) b) What will be the new productivity if the company decides to make 135 chairs/week? (10 marks) c) If the company decides to improve productivity though materials costs reduction only, how much these costs must be reduced in order to achieve a 10 percent increase in total productivity? (10 marks) d) If the company repeats the same exercises as in (c) above, but through labor costs reduction, how much these costs must be reduced in order to achieve a 10 % increase in total productivity? (10 marks) A furniture manufacturing company working on a 40 hours/week basis makes 100 chairs. The sales price is RM70/each and the company has the following costs: Direct materials = RM700 Direct labor = RM300 Overhead = RM500 a) Calculate the productivity of the company. (10 marks) b) What will be the new productivity if the company decides to make 135 chairs/week? (10 marks) c) If the company decides to improve productivity though materials costs reduction only, how much these costs must be reduced in order to achieve a 10 percent increase in total productivity? (10 marks) d) If the company repeats the same exercises as in (c) above, but through labor costs reduction, how much these costs must be reduced in order to achieve a 10 % increase in total productivity? (10 marks)