# Question & Answer: In Myanmar, seven laborers, each making the equivalent of \$2.50 per day, can produce 38 units per day…..

In Myanmar, seven laborers, each making the equivalent of \$2.50 per day, can produce 38 units per day. In China, nine laborers, each making the equivalent of \$2.00 per day, can produce 45 units. In Billings, Montana, four laborers, each making \$57.00 per day, can make 102 units.

Based on labor cost per unit only, the most economical location to produce the item is ____, with a labor cost per unit of \$__. (Enter your response rounded to two decimal places.)

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Question & Answer: In Myanmar, seven laborers, each making the equivalent of \$2.50 per day, can produce 38 units per day…..
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Cost per day = Number of laborers x Rate per day

Cost per unit = Cost per day / Number of units produced

Myanmar

Cost per day = 7 x \$2.50 = \$17.50

Cost per unit = \$17.5 / 38 = \$0.46 per unit

China

Cost per day = 9 x \$2.00 = \$18.00

Cost per unit = \$18.00 / 45 = \$0.40 per unit

Billings

Cost per day = 4 x \$57.00 = \$228.00

Cost per unit = \$228.00 / 102 = \$2.24 per unit

So, from the above calculations, the most economical location to produce the item is China, with a labor cost per unit of \$0.40.