Question: Calculate the break-even point: answer this in detail: Productivity and Financial Impact of TIVO-10K Process Improvement We seek an evaluative report on a new process

Calculate the break-even point: answer this in detail: Productivity and Financial Impact of TIVO-10K Process Improvement We seek an evaluative report on a new process improvement for our TIVO-10K dehydrator fittings, introduced by a junior manager, aimed at increasing output and reducing material costs. The board of directors requires a detailed assessment of the productivity gains and financial implications to determine the viability of this new process. The process improvement in question is designed to increase the production rate of fittings by 25%, decrease material costs, but necessitates an additional employee. Existing Process Metrics:

● Workforce: 5 employees

● Output Rate: 60 fittings per hour

● Labor Cost: $24 per hour, per employee

● Material Cost per Fitting: $32

● Overhead: 1.6 times direct labor cost

● Sale Price per Fitting: $61 New Process Metrics:

● Increased Workforce: 1 additional employee (total of 6)

● Expected Output Increase: 25% (from existing rate)

● Reduced Material Cost per Fitting: $20 (All other costs and sale price are unchanged) Required Analysis:

1) Determine the percentage increase in productivity. Please calculate this in terms of output per labor hour before and after the improvement.

2) Analyze the financial implications by conducting a cost-benefit analysis that encompasses:

● The additional labor cost incurred by hiring one more employee.

● The savings on material costs per fitting with the new process.

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