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Consider this problem for the next five questions: At Kahel Enterprises, a producer of orange crates sold to growers, they are able to produce 450 crates per 100 logs with their current equipment. They currently purchase 100 logs per day, and each log requires 1.5 labor hours to process. They believe that they can hire a professional buyer who can buy better-quality log at the same cost. If this is the case, they can increase their production to 480 crates per 100 logs. Their total labor hours, on the other hand, will increase by an additional 2 hours per day (this is due to the additional logistics operations needed with the professional buyer). Given below are the cost per component in the system, which includes the labor cost, material cost, capital cost, and energy and utility cost.

Consider this problem for the next five questions: At Kahel Enterprises, a producer of orange crates sold to growers, they are able to produce 450 crates per 100 logs with their current equipment. They currently purchase 100 logs per day, and each log requires 1.5 labor hours to process. They believe that they can hire a professional buyer who can buy better-quality log at the same cost. If this is the case, they can increase their production to 480 crates per 100 logs. Their total labor hours, on the other hand, will increase by an additional 2 hours per day (this is due to the additional logistics operations needed with the professional buyer). Given below are the cost per component in the system, which includes the labor cost, material cost, capital cost, and energy and utility cost.

Microeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter9: Price Takers And The Competitive Process
Section: Chapter Questions
Problem 15CQ
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Consider this problem for the next five questions: At Kahel Enterprises, a producer of orange crates sold to growers, they are able to produce 450 crates per 100 logs with their current equipment. They currently purchase 100 logs per day, and each log requires 1.5 labor hours to process. They believe that they can hire a professional buyer who can buy better-quality log at the same cost. If this is the case, they can increase their production to 480 crates per 100 logs. Their total labor hours, on the other hand, will increase by an additional 2 hours per day (this is due to the additional logistics operations needed with the professional buyer). Given below are the cost per component in the system, which includes the labor cost, material cost, capital cost, and energy and utility cost. Component Cost Labor Php 100 / labor hour Material (Logs) Php 200 / log Capital Php 500 / day Energy & Utility Php 350 / day Question 1: What is the current labor productivity? 4.5 logs per labor hour 4.5 crates per labor hour O3 logs per labor hour 3 crates per labor hour
Transcribed Image Text:Consider this problem for the next five questions: At Kahel Enterprises, a producer of orange crates sold to growers, they are able to produce 450 crates per 100 logs with their current equipment. They currently purchase 100 logs per day, and each log requires 1.5 labor hours to process. They believe that they can hire a professional buyer who can buy better-quality log at the same cost. If this is the case, they can increase their production to 480 crates per 100 logs. Their total labor hours, on the other hand, will increase by an additional 2 hours per day (this is due to the additional logistics operations needed with the professional buyer). Given below are the cost per component in the system, which includes the labor cost, material cost, capital cost, and energy and utility cost. Component Cost Labor Php 100 / labor hour Material (Logs) Php 200 / log Capital Php 500 / day Energy & Utility Php 350 / day Question 1: What is the current labor productivity? 4.5 logs per labor hour 4.5 crates per labor hour O3 logs per labor hour 3 crates per labor hour
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