5. Larry\'s Auto Body Repair Shop had revenues that averaged $60,000 per week in

Question

5. Larry's Auto Body Repair Shop had revenues that averaged $60,000 per week in April and $50,000 per week in May. During both months, the shop employed six full-time (40 hours/week) workers. In April the firm also had four part-time workers working 25 hours per week but in May there were no part-time workers helping. Larry believes that even though there’s less revenue in the month of May his Auto Shop is more productive. What is the percentage change in labor productivity from April to May for Larry's Auto Body Repair? A. 17.65 B. 15.84 C. 8.97 D. 1.76 E. 18.06

Explanation / Answer

Labor productivity = Units produced/Labor hours used

April labor producitivity = 60000/(6*40 + 4*25)

= 176.47

May labor producitivity = 50000/(6*40)

= 208.33

Percentage change in labor productivity from April to May = (208.33 - 176.47)/176.47

18.0559 = 18.06%

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