Productivity measure of units of output per dollar of input

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Reference no: EM132282852

A hamburger factory produces 75,000 hamburgers each week. The equipment used costs $8,000 and will remain productive for three years. The labor cost per year is $10,500.

What is the productivity measure of "units of output per dollar of input" averaged over the three-year period? Assume that there are 52 weeks per year. Round your answer to one decimal place.

Productivity: ______ hamburgers/dollar

The company has the option of purchasing equipment for $10,500, with an operating life of four years. It would reduce labor costs to $8,500 per year. Should it consider purchasing this equipment (using productivity arguments alone)? Assume that there are 52 weeks per year. Round your answer for productivity to one decimal place.

For the expensive machine, productivity is ______ hamburgers/dollar input. Because the productivity of the expensive machine is _________, it would be a _______ investment based on this single criterion.

Reference no: EM132282852

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