Must show workSolutionImplement the new process Explanation

Must show work

Solution

Implement the new process

Explanation:

Productivity = output/Input

Output = No of units per hour*price per unit

Labor cost = No of workers*rate per hour

Overhead cost = 1.4*labor cost

Current process:

Output = 200 units*20 = $4000

Input = Labor cost+ Material cost+ Overhead cost = (10*10)+120 + 1.4*(10*10) = 100 + 120 + 140 = 360

Productivity = 4000/360 = 11.11

New process:

Output = 300*20 = 6000

Input = Labor cost+ Material cost+ Overhead cost = (14*10)+150 + 1.4*(14*10) = 140 + 150 + 196 = 486

Productivity = 6000/486 = 12.35

Implement the new process as the productivity is high