Question

White Tiger Electronics produces CD players using an automated assembly line process. The standard cost of CD players is ​$148 per unit​ (labor, ​$25​; ​materials, ​$68​; and​ overhead, ​$55​). The sales price is ​$300 per unit. a. To achieve a 12 percent multifactor productivity improvement by reducing materials costs​only, one needs to reduce the materials cost by nothing percent.​(Enter your response as a percent rounded to two decimal​places.B. To achieve a 12 percent multifactor productivity improvement by reducing labor costs​ only, one needs to reduce the materials cost by nothing percent. ​(Enter your response as a percent rounded to two decimal​ places.a. To achieve a 12 percent multifactor productivity improvement by reducing overhead costs​only, one needs to reduce the materials cost by nothing percent.​(Enter your response as a percent rounded to two decimal​places.)

Answer 1

Answer:

A) a 23.5% decrease in materials

B) a 64% decrease in labor costs

C) a 29.1% decrease in overhead

Explanation:

White Tiger's multifactor productivity = $300 / $148 = 2.027

if we want to increase the multifactor productivity by 12%, it will = 2.27

since we will not change the sales price, we must determine the new total cost:

$300 / cost = 2.27

cost = $300 / 2.27 = $132.16 ≈ $132, which represents a $16 decrease

A) materials ⇒ $16/$68 = 23.5%

B) labor costs ⇒ $16/$25 = 64%

C) overhead ⇒ $16/$55 = 29.1%