Ephraim is analyzing the productivity of his section.Last week his crew worked 4,000 hours and produced 600,000 units of product.The average hourly wage was $7 per hour,and 200 hours were lost to absenteeism.The sale price for the items produced is $2 per unit.What is the labor productivity index?
A) 21.43
B) 42.86
C) 150.00
D) 157.89
E) 300.00

Question

Quizplus · Accepted Answer

Labor Productivity Index = (Total Units Produced / Total Hours Worked) x (Total Hours Available / Total Hours Worked)
Total Hours Available = Total Hours Worked + Hours Lost to Absenteeism
Total Hours Available = 4,000 + 200 = 4,200 hours
Labor Productivity Index = (600,000 / 4,000) x (4,200 / 4,000)
Labor Productivity Index = 150 x 1.05
Labor Productivity Index = 157.89
Therefore, the labor productivity index is 157.89. Option D is correct.

Ephraim Is Analyzing the Productivity of His Section