1. A U.S. manufacturing company operating a subsidiary in an LDC (less-developed
ID: 2805124 • Letter: 1
Question
1. A U.S. manufacturing company operating a subsidiary in an LDC (less-developed country) shows the following results: 19,600 19,550 14,550 20,500 FC 19,550 4,550 100,505 Sales (units) Labor (hours) Raw materials (currency) Capital equipment (hours) 58,600 Foreign Currency unit a-1. Caloulate partial labor and capital productivity figures for the parent and subsidiary,(Round your answers to 2 decimal places.) U.S Labor productivity Capital productivity a-2. Do the results seem confusing? O Yes O No b-1. Compute the multfactor productivity figures for labor and capital together.(Round your answers to 2 decimal places.) U.S LDC Multifactor productivity b-2. Do the results make more sense?Explanation / Answer
a1)Labour productivitiy= sales(units)/labour(hrs)
US=100505/19550=5.14
LDS=19600/14550=1.35
Capital productivity=sales(units)/capital(hrs)
US=100505/58600=1.72
LDC=19600/4550=4.31
a2)Yes they seem consfusing since the labour productivity is higher in US but the capital productivity is higher in LDC
b1)Multifactor productivty=sales(units)/(labour(hrs)+capital(hrs))
US=100505/(19550+58600)=1.29
LDC=19600/(14550+4550)=1.03
b2)Yes this looks much better since the both the factors considered together we can US is doing better
c)Raw material productivity=Sales(units)/raw material(currency)
US=100505/20500=4.90
LDC=19600/(19550/10))=10.03
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