Rane Brake Lining produces disc pads for the automobile industry. With the existing brake lathe machine, the firm utilizes five employees who produce an average of eighty disc pads per hour; each of the employees receive $10 per hour; the machine cost is $40 per hour. The firm purchased a new brake lathe machine to replace the existing brake lathe machine; this reduced the labor content of the jobs needed to produce the disc pads. With the new brake lathe machine, the firm was able to shift one of the employees to another division; the machine cost increased by $10 per hour; and the production output increased by four disc pads per hour.
- Calculate the labor productivity (disc pads per employee per hour) with the existing brake lathe machine, and with the new brake lathe machine.
- Calculate the multi-factor productivity (disc pads per $) with the existing brake lathe machine, and with the new brake lathe machine.
- Calculate the productivity change (%) in labor productivity, and multi-factor productivity
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