Refer to the following:

"Ford built 18 vehicles per auto employee in North America last year, while GM could only manage 12." (The Wall Street Journal)

-In comparison with GM, Ford had
A) higher average variable cost.
B) lower average variable cost.
C) higher total variable cost.
D) both a and c
E) none of the above

Question

Refer to the following:

"Ford built 18 vehicles per auto employee in North America last year, while GM could only manage 12."  (The Wall Street Journal)

-In comparison with GM, Ford had
A) higher average variable cost.
B) lower average variable cost.
C) higher total variable cost.
D) both a and c
E) none of the above

Quizplus · Accepted Answer

The factory is able to produce more bicycles with fewer employees compared to five years prior, indicating an increase in productivity.

Answer: D 
 Assuming a linear relationship between the number of employees and the number of bicycles produced, the average productivity per employee has increased over the five-year period. However, the total labor cost may have decreased or remained the same depending on changes in wages and benefits.

Refer to the Following