A retail store had sales of $45,650 in April and $55,215 in May. The store employs eight full-time workers who work a 40-hour week. In April the store also had six part-time workers at 11 hours per week, and in May the store had eight part-timers at 18 hours per week (assume four weeks in each month). Using sales dollars as the measure of output, what is the percentage change in productivity (dollars output per labor hour) from April to May?

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andromache andromache · Answer 1 · 2019-09-17T08:34:24+02:00

Answer:

The percentage change in productivity (dollars output per labor hour) from April to May is 6.512%

Explanation:

For computing the percentage change in productivity, first, we have to compute the per hour amount. The formula is shown below

= Sales ÷ total labor working hours

For April month,

The sale is $45,650

And, the total working hours = (8 workers × 40 hours) + (6 workers × 11 hours) × 4 weeks per month

= (500 hours + 66 hours) × 4 weeks per month

= 566 hours × 4 weeks per month

= 2,264 hours worked in a month

For May month,

The sale is $55,215

And, the total working hours = (8 workers × 40 hours) + (8 workers × 18 hours) × 4 weeks per month

= (500 hours + 144 hours) × 4 weeks per month

= 644 hours × 4 weeks per month

= 2,576 hours worked in a month

Now put these values to the above formula

So, the answer would be equal to

For April month = $45,650 ÷ 2,264 hours = 20.1236

For May month = $55,215 ÷ 2,576 hours = 21.4343

Now percentage change in productivity equals to

= (May month - April month) ÷ April month × 100

= (21.4343 - 20.1236) ÷ 20.1236 × 100

= 1.3107 ÷ 20.1236 × 100

= 6.51%