Question

A productivity index of 110% means that a company’s labor costs would have been 10% higher if it had not made production improvements. Now refer to the Income Statement in Chester's Annual Report. The direct labor costs for Chester were $32,460. These labor costs could have been $20,000 higher if investments in training that increased productivity had not been made. What was the productivity index for Chester that led to such savings?

Select: 1

	44.5%
	38.4%
	155.5%
	161.6%

Answer 1

direct labor costs	$32,460
how much more labor costs would have been	$20,000
percentage of total labor	61.61%
Productivity Index (ans.: d)	161.61%

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