The weekly output of a fabrication process is shown below together with data for
ID: 425261 • Letter: T
Question
The weekly output of a fabrication process is shown below together with data for labor and material costs. Overhead is charged weekly at the rate of 1.5 times direct labor cost. Assume a 40-hour week and an hourly wage of $25. (1) What is the multifactor productivity for each of the three weeks? (2) What is the growth rate (in percentage) of weekly multifactor productivity from week 1 to week 2 and week 2 to week 3? Week Output No. of workers Material costs 1 32000 6 18000 2 35000 7 20000 3 36000 6 23000
Explanation / Answer
1. Multifactor productivity = total output / total cost
Week 1 = 32000 / 18000+ 6x40x25 ( 1+1.5)
= 32000 / 18000+15000 = 32000/33000 = 0.9696
Week 2 = 35000 / 20000+ 7x25x40 ( 2.5) = 35000/37500 = 0.9333
week 3 = 36000 / 23000+ 6x40x25( 2.5) = 36000 / 38000 = 0.9473
(2) Percentage increase from week 1 to 2 = 0.9333/0.9696 =0.9625
A decrease of ( 1-0.9625) = 3.74%
Percentage increase fro week 2 to 3 = 0.9473/ 0.9333 =1.015
Increase of ( 1.015-1) = 1.5%
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.