A U.S. manufacturing company operating a subsidiary in an LDC (less-developed co

Question

A U.S. manufacturing company operating a subsidiary in an LDC (less-developed country) shows the following results Sales (units) Labor (hours) Raw materials (currency) Capital equipment (hours) U.S 19,900 59,700 LDC 20,300 14,900 106,000 $ 19,700 FC 19,900 4,900 Foreign Currency unit a. Calculate partial labor and capital productivity figures for the parent and subsidiary. (Round your answers to 2 decimal places.) U.S LDC Labor productivity Capital productivity b. Compute the multifactor productivity figures for labor and capital together. (Round your answers to 2 decimal places.) U.S LDC Multifactor productivity C. Calculate raw material productivity figures (units/$ where $1 = FC 10). (Round your answers to 2 decimal places.) U.S LDC Raw material productivity

Explanation / Answer

Productivity = Output/Input

a)

US:

Labor productivity = 106000/19900 = 5.33 units per hour

Capital productivity = 106000/59700 = 1.78 units per hour

LDC:

Labor productivity = 20300/14900 = 1.36 units per hour

Capital productivity = 20300/4900 = 4.14 units per hour

b)

US:

Multifactor productivity = 106000/ (19900+59700) = 100500/78400 = 1.33

LDC:

Multifactor productivity = 20300/(14900+4900) = 1.03

c)

US:

Raw material productivity = 106000/19700 = 5.38

LDC:

Given $1 = FC 10

Input = 19900/10 = $1990

Raw material productivity = 20300/1990 = 10.20

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