Problem
Size conditioners a manufacturing firm based in Gauteng makes three different types of air conditioners: the ceiling type, the cassette type and the wall mounted type. Weekly sales of each type are two, four and six units at a price of R350, R450 and R500 each, respectively. The ceiling type can be assembled in 1.5 hours, the cassette type in one hour, and the wall mounted type in 45 minutes. Labor cost is R40 per hour and the factory's multifactor productivity is 2.2. Determine the average cost per air conditioner based on the current multifactor productivity. Also calculate the labor productivity in rands for each type of air conditioner. Lastly comment on where the company should focus its efforts-based on labor productivity and average cost.