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A company has introduced the process improvement which diminishes processing time for each unit, so that output is raised by 25% with less material, but one additional worker required. Under old process, five workers could manufacture 60 units per hour. Labour costs are $12/hour, and material input was previously $16/unit. For new process, material is now $10/unit. Overhead is charged at 1.6 times direct labour cost. Finished units sell for $31 each. What rise in productivity is associated with process improvement? Please give steps with how you solved the answer

Operation Management, Management Studies

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