Question: Electro Tech Inc. manufactures electrical assemblies. The current process uses 10 workers and produces 200 units per hour. You are considering changing the process with

Electro Tech Inc. manufactures electrical assemblies. The current process uses 10 workers and produces 200 units per hour. You are considering changing the process with new assembly methods that increase output to 300 units per hour but will require 14 workers. Particulars are as follows: Electro Tech pays workers $10 per hour, and overhead is charged at 140% (or 1.4 t imes) of labour costs. Finished switches sell for $20/unit. Use the information provided in the table above to answer the following:

a. Calculate the labour productivity for the current process.

b. Calculate the multifactor productivity for the current process.

c. Calculate the labour productivity for the new process.

d. Calculate the multifactor productivity for the new process. CURRENT PROCESS NEW PROCESS OUTPUT (UNITS / HOUR) 200 300 NUMBER OF WORKERS 10 14 MATERIAL COST / HOUR $120 $150

e. Should the company implement the new process? Why

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