OPM200- 002 pearson fall 2014-2015

The Big Black Bird Company (BBBC) has a large order for special plastic-lined military uniforms to be used in an urgent Middle East operation.  Working the normal two shifts of 40 hours, BBBC usually produces 2,400 uniforms per week at a total cost (labor + material + overhead) of $120 each.  The contract price is $240 per uniform.  Because of the urgent need, BBBC has authorized around-the-clock production, six days a week.  When each of the two shifts works 72 hours per week, production increases to 3800 uniforms per week, but at a total cost of $152 each. 

a.  Did the labor productivity ratio increase, decrease, or remain the same?  If it changed,

     by what percent did it change?

b.  Did the multi-factor productivity ratio increase, decrease, or remain the same?  If it

     changed, by what percent did it change?

c.  Did the weekly profits increase, decrease, or remain the same?

d.  Is it worth it?