Question

A textile factory in the United States plays 300 workers a total of $9 million each year to produce 4.5 million shirts. A foreign factory employs 225 workers at a total cost of $1,050,000 to produce 2,500,00 shirts. How do the labor costs per shirt of the American and foreign factory compare

Answer 1

Answer:

The labor cost per shirt of the American factory is 0.36 times the labor cost per shirt of the foreign company.

Step-by-step explanation:

A textile factory in the United States plays 300 workers a total of $9 million each year to produce 4.5 million shirts.

Therefore, the labor cost per shirt will be

$\frac{9 \times 10^{6}}{300 \times 4.5 \times 10^{6}} = 0.0067$

Again, a foreign factory employs 225 workers at a total cost of $1,050,000 to produce 2,500,00 shirts.

Therefore, the labor cost per shirt will be

$\frac{1050000}{250000 \times 225} = 0.01867$

Therefore, the labor cost per shirt of the American factory is 0.36 times (Approximate) the labor cost per shirt of the foreign company. (Answer)