mc Charles Lackey operates a bakery in Idaho Falls daho. Because ofits excellent

Question

mc Charles Lackey operates a bakery in Idaho Falls daho. Because ofits excellent product and excellent ocation, demand has increased by 25% n he last year. On far too many occasions, customers have not been able to purchase the bread of their choice. Because of the size of the store, no new ovens can be added. At a staff meeting, one employee suggested ways to load the ovens differently so that more loaves of bread can be baked at one time. This new process will require that the ovens be loaded by hand, requiring additional manpower. This is the only production change that will be made in order to meet the increased demand. The bakery currently makes 1,500 loaves per month. Employees are paid $8 per hour. In addition to the labor cost, Charles also has a constant utility cost per month of $600 and a per loaf ingredient cost of $0.50 ave Current multifactor productivity for 640 work hours per month loaves/dollar (round your response to three decimal places) After increasing the number of work hours to 800 per month, the multifactor productivity loaves/dollar (round your response to three decimal places). abor h orkers ne available hour le 2.344-16 The percentage increase in productivity % (enter your response as a percentage rounded to two decimal places). honth neeo extra me 375 Enter your answer in each of the answer boxes. d to i 1 worker Show AI X hr omll cho1.ppt MVIMG 20180319 09 JPg

Explanation / Answer

To be calculated:

a) Current multi-factor productivity

b) New multi-factor productivity

c) Percentage increase in productivity

Given values:

Current production = 1,500 loaves per month

Labor cost = $8 per hour

Constant utility cost = $600 per month

Ingredient cost = $0.50 per loaf

Increase in demand = 25%

(a) Current multi-factor productivity for 640 work hours per month is calculated as;

Multi-factor productivity = Total output / Total input in dollars

Total input in dollars = Labor cost + Utility cost + Ingredient cost

Multi-factor productivity = Total output / (Labor cost + Utility cost + Ingredient cost)

Multi-factor productivity = 1500 / [(640 x $8) + $600 + (1500 x $0.50)]

Multi-factor productivity = 1500 / 6470

Multi-factor productivity = 0.232 loaves/dollar

(b) New multi-factor productivity for 800 work hours per month is calculated as;

Current production = 1,500 loaves per month

Increased production = 1500 + (1500 x 25/100) = 1,875 loaves per month

Multi-factor productivity = Total output / (Labor cost + Utility cost + Ingredient cost)

Multi-factor productivity = 1875 / [(800 x $8) + $600 + (1875 x $0.50)]

Multi-factor productivity = 1875 / 7937.5

Multi-factor productivity = 0.236 loaves/dollar

(c) The percentage increase in productivity is calculated as;

Percentage increase in productivity = [(New productivity - Old productivity) / Old productivity] x 100

Percentage increase in productivity = (0.236 - 0.232) / 0.232 x 100

Percentage increase in productivity = 1.72%

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.