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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 only two part-time workers and they only worked 10 hours per week. What is the percentage change in labor productivity from April to May for Larry's Auto Body Repair

Respuesta :

Answer:

8.98%

Explanation:

Assuming there 4 weeks in a month, this the percentage change in labor productivity from April to May can be calculated as follows:

For April:

Full time workers’ April total labor hours = 40 hours × 4 weeks × 6 labor = 960 labor hours

Part time workers’ April total labor hours = 4 labor × 25 hours × 4 weeks = 400 labor hours

April total labor hours = 960 + 400 = 1,360 labour hours

April total revenue = $60,000 × 4 weeks = $240,000

April labour productivity = Total revenue ÷ Total labor hours = $240,000 ÷ 1,360 = $176.47 per labor hour

For May:

Full time workers’ May total labor hours = 40 hours × 4 weeks × 6 labor = 960 labor hours

Part time workers’ May total labor hours = 2 labor × 10 hours × 4 weeks = 80 labor hours

May total labor hours = 960 + 80 = 1,040 labour hours

May total revenue = $50,000 × 4 weeks = $200,000

May labour productivity = Total revenue ÷ Total labor hours = $200,000 ÷ 1,040 = $192.31 per labor hour

Calculation of percentage change in labor productivity from April to May:

Percentage change = [(May labour productivity – April labour productivity) ÷ May labour productivity] × 100

Percentage change == [(192.31 – 176.47) ÷ 176.47] × 100 = [15.84 ÷ 176.47] × 100 = 8.98%

Therefore, the percentage change in labor productivity from April to May for Larry's Auto Body Repair is 8.98%.

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