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

The percentage change in productivity (dollars output per labor hour) from April to May is 10.37%.

Explanation:

This can be calculated using the following 3 steps:

Step 1. Calculation of productivity in April

Sales in April = $46,000

Total full-time hours worked in April = 40 * 8 * 4 = 1,280

Total part-time hours worked in April = 9 * 6 * 4 = 216

Total hours worked in April = Total full-time hours worked in April + Total part-time hours worked in April = 1,496

Productivity in April = Sales in April / Total hours worked in April = $46,000 / 1,496 = $30.75 per hour

Step 2. Calculation of productivity in May

Sales in May = $55,800

Total full-time hours worked in May = 40 * 8 * 4 = 1,280

Total part-time hours worked in May = 13 * 7 * 4 = 364

Total hours worked in May = Total full-time hours worked in May + Total part-time hours worked in May = 1,644

Productivity in May = Sales in May / Total hours worked in May = $55,800 / 1,644 = $33.94 per hour

Step 3. Calculation of percentage change in productivity (dollars output per labor hour) from April to May

Percentage change in productivity = ((Productivity in May - Productivity in April) / Productivity in May) * 100 = (($33.94 - $30.75) / $30.75) * 100 = 10.37%

Therefore, the percentage change in productivity (dollars output per labor hour) from April to May is 10.37%.