Show all work! Straight Arrow Software provides a number of different services f
ID: 3146155 • Letter: S
Question
Show all work! Straight Arrow Software provides a number of different services for its clients. Last month they did the followin9 Service Number of jobs Price Hourly wage Materials cost per Repair operating 6 $1,000 40 $100 system Replace hard drive 4 Troubleshoot and fix 3 $1,000 $60 $200 $7,000 $50 $250 network a. If the total number of working hours last month was 480, what was the labor productivity last month? b. What is the multifactor productivity, if the firm consists of one operating system specialist, one hard drive repair person, and one network specialist, working hours were split evenly among the three, and overhead is calculated as .25 times labor cost?Explanation / Answer
a) Working hours of each Labor = 480 / 3 = 160
Labor cost = 160 x $40 + 160 x $60 + 160 x $50 = $24,000
Revenue = 6 x $1,000 + 4 x $1,000 + 3 x $7,000 = $31,000
So, Labor productivity = Revenue / Labor cost
= $31,000 / $24,000 = 1.292 per dollar of labor.
b) Material Cost = 6 x $100 + 4 x $200 + 3 x $250 = $2,150
Overhead = 0.25 x Labor cost = 0.25 x $24,000 = $6,000
Total Cost = $24,000 + $2,150 + $6,000 = $32,150
Multifactor productivity = $31,000 / $32,150 = 0.964 per dollar of input
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