Question

A small assembly line currently produces 8000 widgets per week. Assume that there are two inputs: labor and materials. There are 5 employees, each working 40 hours per week for an hourly rate of $15. Each week 100 lbs of materials are used, which cost $50 per lb. What is the weekly productivity level for this operation

Answer 1

Answer: 1 widget per dollar

Explanation:

The weekly productivity level for this operation will be calculated thus:

Output = 8000 widgets per week.

Input = Labor Cost + Material Cost

= (5 × 40 × $15) + (100 × $50)

= $3000 + $5000

= $8000

Productivity = Output / Input

= $8000 / $8000

= 1 widget per dollar