?Mack\'s guitar fabrication shop produces low? cost, highly durable guitars for

Question

?Mack's guitar fabrication shop produces low? cost, highly durable guitars for beginners.? Typically, out of the 100 guitars that begin production each? month, only 80 percent are considered good enough to sell. The other 20 percent are scrapped due to quality problems that are identified after they have completed the production process. Each guitar sells for ?$240. Because some of the production process is? automated, each guitar only requires 10 labor hours. Each employee works an average of 160 hours per month. Labor is paid at ?$10 per? hour, materials cost is ?$40 per? guitar, and overhead is ?$3,800.
a. The labor productivity ratio for? Mack's guitar fabrication shop is ?$__ per hour. ?(Enter your response rounded to two decimal? places.)

Explanation / Answer

Labour productivity ratio= total output/ labour rate

Total output= utility product* output price

                       = 80* 250= 20000

Labour rate= skilled labour input + overhead+ material cost

                     = (160*10) + 4000 + (400*10)

                     = 1600+4000+4000

                     = 9600

Labout productivity ratio = 20000/9600= 2.08

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