Two types of cars (Deluxe and Limited) were produced by a car manufacturer last year. Quantities sold, price per unit, and labor hours are given below. QUANTITY $/UNIT Deluxe car 4,000 units sold $ 8,000 /car Limited car 6,000 units sold $ 9,500 /car Labor, Deluxe 20,000 hours $ 12 /hour Labor, Limited 30,000 hours $ 14 /hour What is the labor productivity for each car? Provide two sets of figures: units per labor hour, and dollar of output per dollar of labor expense. (Round your answers to 2 decimal places.)

Explanation:

From the given information; we have:

                          QUANTITY                         $ / UNIT

Deluxe car        4,000 units sold                  $ 8,000 /car

Limited car       6,000 units sold                   $ 9,500 /car

Labor, Deluxe   20,000 hours                       $ 12 /hour

Labor, Limited    30,000 hours                      $ 14 /hour

The objective is to determine:

                               LABOUR PRODUCTIVITY

                  units per labor hour       dollar of output  per dollar of labor

                                                           expense

Deluxe car

Limited car

Firstly; let's us find the Labor productivity in unit/hour For the two cars;

For Deluxe car;

Labor productivity in unit/hour = Output(units)/Input ( Hours)

Labor productivity in unit/hour =  

For Limited car;

Labor productivity in unit/hour =  

Similarly; Labor productivity in dollar of output  per dollar of labor expense is:

output in dollars/input in dollars

For Deluxe Car;

output in dollars = 4000×8000  = 32000000

input in dollars = 20000×12 = 240000

Labor productivity in dollar of output  per dollar of labor expense is=

output in dollars/input in dollars

Labor productivity in dollar of output  per dollar of labor expense:

For Limited Car;

output in dollars = 6000×9500  = 57000000

input in dollars = 30000×14 = 420000

Labor productivity in dollar of output  per dollar of labor expense is=

output in dollars/input in dollars

Labor productivity in dollar of output  per dollar of labor expense:

                      LABOUR PRODUCTIVITY:

                  units per labor hour       dollar of output  per dollar of labor

                                                           expense

Deluxe car    0.20                                133.33

Limited car    0.20                                135.71

answer makes less frequent trips to the bank and firms make less frequent price changes;