- abe X2 Font Paragraph homework -Productivity TLW Consulting has been concerned
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- abe X2 Font Paragraph homework -Productivity TLW Consulting has been concerned about declining profitability and the president has asked you to evaluate productivity over the past two years. After several weeks, you have managed to collect the following data about company operations Current Year Last Year 30,000 160,000 125,000 Billable Hours Labor Houns Travel Information Technology Management Overhead Capital Investment 150,000$4500000 $4,000,000 $3,200,000 $5,000,000 $3,000,000 $5,800,000 $7,000,000 The average charge for billable hours is $300 and the average cost per labor hour is $95. Invested capital is exclusive of information technology investment. The productivity of an individual factor involves comparing the cost of that input factor to the value of the output, which is billable bours. 1. what is the output in hours? 2 what is the labor productivity for last year in dollars? 2.b. What is the labor productivity for this year in dollars? 2.c. what is the percent change in productivity? what is the total-factor productivity (use all the inputs) for this year based on the above factors? 3.b. What is the multi-factor productivity for last year? 3.c. What is the change in productivity from last year to this year? English (United States)Explanation / Answer
1) Output in hours is billable hours.
Last year = 125,000
Current year =130,000
2) a) Labor productivity for last year = Output hours/Labor hours = 125,000/150,000 = 0.833
b) Labor productivity for current year = 130,000/160,000 = 0.813
c) % change = (0.813-0.833)/0.833*100 = -2.40%
3) a) Total or multifactor productivity = Output value/(Labor cost + Travel + IT + Management overhead + Capital investment)
= (125,000*300)/(150,000*95 + 4,000,000 + 3,200,000 + 5,000,000 + 3,000,000) = 1.273
b) Total productivity = (130,000*300)/(160,000*95 + 4,500,000 + 5,800,000 + 7,000,000 + 4,500,000) = 1.054
c) % change = (1.054 - 1.273)/1.273*100 = -17.20%
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