QB Food Factory produces 67,000 hamburgers per month. The hamburger production equipment costs $9,000 and will remain productive for five years. Using this equipment, the labour cost is $12,000 annually.

(a) What is QB’s productivity measure of “units of output per dollar input” averaged over the five-year period?

(b) The company is considering to purchase an automated equipment for $20,000, with an operating life of 4 years. It would reduce labour costs to $7,000 per year with the same output level. Based on the productivity measure in part (a), what should QB’s decision be as to whether to buy this equipment?

(c) Explain the implication of automation on environmental, social and economic sustainability for QB. Give examples to support your answer.

Answer rating: 100% (QA)

a To calculate QBs productivity measure of units of output per dollar input averaged over the fiveyear period we need to determine the total units of output and the total dollar input Total units of o... View the full answer