The following table shows data on the average number of customers processed by s
ID: 407553 • Letter: T
Question
The following table shows data on the average number of customers processed by several bank service units each day. The hourly wage rate is $25, the overhead rate is 1.0 times labor cost, and material cost is $5 per customer.
Compute the labor productivity and the multifactor productivity for each unit. Use an eight-hour day for multifactor productivity. (Round your "Labor Productivity" answers to 1 decimal place and "Multifactor Productivity" answers to 3 decimal places.)
Suppose a new, more standardized procedure is to be introduced that will enable each employee to process one additional customer per day. Compute the expected labor and multifactor productivity rates for each unit. (Round your "Labor Productivity" answers to 1 decimal place and "Multifactor Productivity" answers to 3 decimal places.)
The following table shows data on the average number of customers processed by several bank service units each day. The hourly wage rate is $25, the overhead rate is 1.0 times labor cost, and material cost is $5 per customer.
Explanation / Answer
a)
The following table shows the calculations. Sample calculations for understanding are given below:
Labor Cost = Number of labor x 8 hours per day x Cost per hour
Unit A = 4 x 8 x $ 25
= $ 800
Overhead = Labor cost
Material = Number of customer x $ 5
Unit A = 36 x $ 5
= $ 180
Total Cost = Labor + Overhead + Material
Unit A = $ 800 + $ 800 + $ 180
= $ 1,780
Labor productivity
= Number of Customers / Number of Labor
Unit A = 36 / 4 = 9
MFP = Number of customers / Total Cost
Unit A = 36 / 1,780
= 0.02
b)
As per new procedure, new number of customers will be as follows:
A = 36 + 1 x 4 = 40 (Old number of customers + number of employees x 1)
The new table is presented below:
Unit Employees Customers per day Labor Cost Overhead Cost Material Cost Total Cost Labor Productivity MFP A 4 36 800 800 180 1,780 9 0 B 7 44 1,400 1,400 220 3,020 6 0 C 8 58 1,600 1,600 290 3,490 7 0 D 2 24 400 400 120 920 12 0Related Questions
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