1. Two workers have the job of placing plastic labels on packages before the
packages are shipped out. The first worker can place 1000 labels in 30
minutes. The second worker can place 850 labels in 20 minutes. Which
worker is more productive?
2. Last week employees at Bluegill produced 46 chairs after working a total
of 200 hours. Of the 46 chairs produced, 12 were damaged due to a problem
with the new sanding machine. The damaged chairs can be discounted and
sold for $25 each. The undamaged chairs are sold to a department store retail
chain for $70 each. What was the labor productivity ratio for last week?
a) If labor productivity was $15 in sales per hour the previous week, what
was the change in labor productivity?
3. One type of bread-making machine can make six loaves of bread in five
hours. A new model of the machine can make four loaves in two hours.
Which model is more productive?
4. See-Clear Optics is considering producing a new line of eyewear. After
considering the costs of raw materials and the cost of some new equipment,
the company estimates fixed costs to be $40,000 with a variable cost of $45
per unit produced.
(a) If the selling price of each new product is set at $100, how many units
need to be produced and sold to break even? Use both the graphical and
algebraic approaches.
(b) If the selling price of the product is set at $80 per unit, See-Clear
expects to sell 2000 units. What would be the total contribution to profit
from this product at this price?
(c) See-Clear estimates that if it offers the product at the original
target price of $100 per unit, the company will sell about 1500 units. Will
the pricing strategy of $100 per unit or $80 per unit yield a higher
contribution to profit?
5. Tasty Ice Cream is a year-round take-out ice cream restaurant that is
considering offering an additional product, hot chocolate. Considering the
additional machine it would need plus cups and ingredients, it estimates
fixed costs to be $200 per year and the variable cost to be $0.20. If it
charges $1.00 for each hot chocolate, how many hot chocolates does it
need to sell in order to break even?
