19 May, 18:02

# White Tiger Electronics produces CD players using an automated assembly line process. The standard cost of CD players is \$148 per unit (labor, \$25 ; materials, \$68 ; and overhead, \$55 ). The sales price is \$300 per unit. a. To achieve a 12 percent multifactor productivity improvement by reducing materials costs only, one needs to reduce the materials cost by nothing percent. (Enter your response as a percent rounded to two decimal places. B. To achieve a 12 percent multifactor productivity improvement by reducing labor costs only, one needs to reduce the materials cost by nothing percent. (Enter your response as a percent rounded to two decimal places. a. To achieve a 12 percent multifactor productivity improvement by reducing overhead costs only, one needs to reduce the materials cost by nothing percent. (Enter your response as a percent rounded to two decimal places.)

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1. 19 May, 21:58
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A) a 23.5% decrease in materials

B) a 64% decrease in labor costs

C) a 29.1% decrease in overhead

Explanation:

White Tiger's multifactor productivity = \$300 / \$148 = 2.027

if we want to increase the multifactor productivity by 12%, it will = 2.27

since we will not change the sales price, we must determine the new total cost:

\$300 / cost = 2.27

cost = \$300 / 2.27 = \$132.16 ≈ \$132, which represents a \$16 decrease

A) materials ⇒ \$16/\$68 = 23.5%

B) labor costs ⇒ \$16/\$25 = 64%

C) overhead ⇒ \$16/\$55 = 29.1%