9. A paint manufacturing company has three factories located in France, Germany,

Question

9. A paint manufacturing company has three factories located in France, Germany, and Spain. The productivity data of the factories are as follows: Factory Location Amount of PaintTotal Input Cost (USD) Produced (U.S. Gallons) Spain Germany France 4,600,000,000 5,500,000,000 4,000,000,000 $5,250,000 $5,250,000 $3,500,000 Based on the productivity analysis of all the factories, the productivity of the factory in: a. Germany is lower than that of the factory in Spain. b. Spain is higher than that of the factory in France. c. France is higher than that of the factory in Spain. d. France is lower than that of the factory in Germany

Explanation / Answer

Answer: -

Option “C” ---- France is higher than that of the factory in Spain.

Explanation:-

Productivity analysis of Spain, Germany and France are shown below:-

For Spain Total input cost is $5,250,000 for 4,600,000,000 then production cost per unit is

Production cost per unit = 4,600,000,000/$5,250,000 = 876.19047619

Productivity = 876.19047619/4,600,000,000 = 0.00000019048

Similarly for Germany

Production cost per unit = 5,500,000,000/$5,250,000 = 1047.61904762

Productivity = 1047.61904762/5,500,000,000 = 0.00000019048

Similarly for France

Production cost per unit = 4,000,000,000/$3,500,000 = 1142.85714286

Productivity = 1142.85714286/4,000,000,000 = 0.0000028571

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