Answer to Question #71224 in Other Economics for JANE
a) Calculate the labor productivity in units per month
b) Determine the number of vehicles queued at the end of the day and month
c) Is this business profitable if the tyre replacement is priced at $60/tyre and $45/tyre on overheads
a) The labor productivity in units per month is:
60*8*20/15 = 640 units per worker per month.
b) Determine the number of vehicles queued at the end of the day is:
60*8/15/4 = 8 vehicles.
At the and of the month:
8*20 = 160 vehicles.
c) If the tyre replacement is priced at $60/tyre and $45/tyre on overheads, then the amount of profit is: TP = TR - TC = P*Q - (VC + FC) = 60*640 - 45*640 - 5000 = $4600.
So, this business is profitable.
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