Production (dozen) Last Year 1,000 This year 1,000 Labor (hours) Last year 300 T
ID: 399305 • Letter: P
Question
Production (dozen) Last Year
1,000 This year
1,000
Labor (hours) Last year
300 This year
280
Capital investment ($) Last
10,000 This
14,000
Energy (BTU) Last
3,600 This 3300
Production (dozen) Last Year
1,000 This year
1,000
Labor (hours) Last year
300 This year
280
Capital investment ($) Last
10,000 This
14,000
Energy (BTU) Last
3,600 This 3300
As part of a study for the Department of Labor Statistics, you are assigned the task of evaluating the improvement in productivity of small businesses. Data for one of the small businesses you are to evaluate is shown below. The data are the monthly average of last year and the monthly average this year. Labor $13 per hour Capital 0.84% per month of investment Energy 50.45 per BTU EEB Click the icon to view the data for one of the small businesses you are to evaluate a) Determine the multifactor productivity with dollars as the common denominator for last year The multifactor productivity with dollars as the common denominator for last year is dozen/$. (Round your response to three decimal places.) b) Determine the multifactor productivity with dollars as the common denominator for this year. The multifactor productivity with dollars as the common denominator for this year isdozen/S. (Round your response to three decimal places) c) Determine the percent change in productivity for the monthly average last year versus the monthly average this year on a multifactor basis The percent change in productivity for the monthly average is D9 Round your response to one decimal placeExplanation / Answer
Given: Hourly wage rate = $ 13 Energy (per BTU) = $0.45 per BTU Capital = 0.84 % of per month investment a) Computation of Multifactor productivity Last Year: Monthly Average (a) Production (dozen) 1,000 Labor (hours) 300 Capital investment ($) 10,000 Energy (BTU) 3,600 Multifactor productivity = Output / Total cost = 1,000 / $16,528 = 0.061 dozen / $ Output = 1,000 dozens Total Cost Labor cost = 300 hours * $13 = $ 3,900 Capital cost = [$10,000 + ($10,000 * 0.84% *12)] = $ 11,008 Energy cost = 3,600 BTU * $0.45 = $ 1,620 Total cost = $ 16,528 b) Computation of Multifactor productivity This Year: Monthly Average (a) Production (dozen) 1,000 Labor (hours) 280 Capital investment ($) 14,000 Energy (BTU) 3,300 Multifactor productivity = Output / Total cost = 1,000 / $20,536 = 0.049 dozen / $ Output = 1,000 dozens Total Cost Labor cost = 280 hours * $13 = $ 3,640 Capital cost = [$14,000 + ($14,000 * 0.84% *12)] = $ 15,411 Energy cost = 3,300 BTU * $0.45 = $ 1,485 Total cost = $ 20,536 c) Change in the multifactor productivity = [(This year multifactor - Last year multifactor) / Last year multifactor] * 100 = [(0.049 - 0.061)/.061] * 100 = -19.7%
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