The Dulac Box Plant Produces Wooden Packing Boxes to Be

question 112

Essay

The Dulac Box plant produces wooden packing boxes to be used in the local seafood industry. Current operations allow the company to make 500 boxes per day, in two 8-hour shifts (250 boxes per shift). The company has introduced some small changes in equipment, and conducted appropriate job training, so that production levels have risen to 300 boxes per shift. These changes did not require any change in the amount of capital spending or energy use. What is the firm's new labour productivity?

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Definitions:

Residual Value

Residual value is the estimated value of an asset at the end of its useful life, reflecting what it could be sold for or its scrap value.

Double-Declining Balance

An accelerated method of depreciation that doubles the regular depreciation approach, resulting in larger depreciation expenses in the initial years of an asset's life.

Units-Of-Output

A method of depreciation that allocates the cost of an asset over its useful life based on the number of units it produces.

Straight-Line

A technique for computing an asset's depreciation by distributing its cost evenly across each year of its expected useful life.