The following table shows data on the average number of customers processed by s

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 $15, the overhead rate is 1 times labor cost, and material cost is $5 per customer. Unit Employees Customers ProcessedDay 39 43 58 30 a. 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.) Labor Productivity Multifactor Productivity Unit (customers per day per worker) (customers per dollar input) b. 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.) Labor Productivity Multifactor Productivity Unit (customers per day per worker) (customers per dollar input)

Explanation / Answer

Labor productivity (LP) = Number of customers processes per day/Number of employees

Multifactor productivity (MP) = Number of customers processes per day/Total input cost

Total input cost = Employee cost + Overhead rate + Material cost

Employee cost = Number of employees*15*8

Overhead rate = Employee cost

Material cost = Customers processed*5

a)

A:

LP = 39/5 = 7.80

MP = 39/(2*120*5+39*5) = 0.03

B:

LP = 43/7 = 6.14

MP = 43/(2*120*7 + 43*5) = 0.02

Similarly

C:

LP = 14.50, MP = 0.05

D:

LP = 10.00, MP = 0.03

b) Now, number of customers increased by 1 for each employee to:

A:

LP = 44/5 = 8.80, MP = 44/(2*120*5 + 44*5) = 0.028

B:

LP = 7.14, MP = 0.023

C:

LP = 15.50, MP = 0.046

D:

LP = 11.00, MP = 0.034

Employees Customers A 5 44 B 7 50 C 4 62 D 3 33

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