Answer Happy

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 78 percent are considered good enough to sell. The other 22 percent are scrapped due to quality problems that are identified after they have completed the production process. Each guitar sells for $250. Because some of the production process is automated, each guitar only requires 12 labor hours. Each employee works an average of 160 hours per month. Labor is paid at $11 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 $ 16.25 per hour. (Enter your response rounded to two decimal places.) The multifactor productivity ratio for Mack's guitar fabrication shop is 92 (Enter your response rounded to two decimal places) b. After some study, the operations manager Darren Funk recommends 3 options to improve the company's multifactor productivity: > Option 1: increase the sales price by 16 percent > Option 2 improve quality so that only 16 percent are defective, or > Option 3: reduce labor, materials, and overhead costs by 16 percent. If Mack's guitar fabrication shop decides to implement Darren Funk's option 1 to improve the multifactor productivity, the new productivity level would be 1.08 (Enter your response rounded to two decimal places.) If Mack's guitar fabrication shop decides to implement Damen Funk's option 2 to improve the multifactor productivity, the new productivity level would be (Enter your response rounded to two decimal places)