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A retail store had sales of $46,000 in April and $55,800 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 9 hours per week, and in May, the store had seven part-timers at 13 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?

Answer :

Final answer:

To find the percentage change in productivity from April to May for the retail store, calculate the total labor hours for each month, the productivity (sales per labor hour) for each month, and then use the formula for percentage change. The result shows an 11.92% increase in productivity from April to May.

Explanation:

Calculating the Percentage Change in Productivity

To calculate the percentage change in productivity, we need to determine productivity for each month in terms of sales dollars per labor hour. For April, the store had 8 full-time workers at 40 hours per week and 6 part-time workers at 9 hours per week for four weeks. May had the same number of full-time workers, but 7 part-time workers at 13 hours per week.

First, calculate the total labor hours for April: (8 full-time workers x 40 hours/week x 4 weeks) + (6 part-time workers x 9 hours/week x 4 weeks) = 1,288 labor hours. For May: (8 full-time workers x 40 hours/week x 4 weeks) + (7 part-time workers x 13 hours/week x 4 weeks) = 1,396 labor hours.

Next, calculate productivity: April's productivity = $46,000 / 1,288 labor hours = $35.71 per labor hour. May's productivity = $55,800 / 1,396 labor hours = $39.97 per labor hour.

Finally, calculate the percentage change in productivity: (($39.97 - $35.71) / $35.71) x 100 = 11.92% increase in productivity from April to May.

Productivity is a critical measure of business performance and understanding changes in it can significantly impact a company's staffing and financial strategies.

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