What increase in productivity is associated with the process

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Question: SSR makes wheel rims for the offroad truck category as well. SSR's management has introduced a process improvement that reduces processing time for each rim, so that output is increased by 25% with less material, but one additional worker required. Under the old process, five workers could produce 60 rims per hour. Labour costs are $16/hour, and material input was previously $32/rim. For the new process, material is now $20/rim. Overhead is charged at 1.6 times direct labour cost. Finished rims sell to distributors for $62 each. What increase in productivity is associated with the process improvement?

Reference no: EM133412036

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