PRODUCTIVITY USING OLD AND NEW SYSTEM (Prob 1: Productivity) A company has introduced a process impr

PRODUCTIVITY USING OLD AND NEW SYSTEM

(Prob 1: Productivity)

A company has introduced a process improvement that reduces
processing time for each unit, so that output is increased by 25% with less
material, but one additional worker required Under old process, five workers
could produce 60 units per hour Labor costs are $12/hour, and material input
was previously $16/unit For the new process, material is now$10/unit Overhead
is charged at 16 times direct labor cost Finished units are sold for $31
each What increase (or decrease) in productivity is associated with the
process improvement?

(a) Productivity
with old system

(b) Productivity
with new system

(c) % change
(increase or decrease) in productivity