Productions of chocolate bars. Assume 40-hour weeks and an hourly wage of $12. O
ID: 448155 • Letter: P
Question
Productions of chocolate bars. Assume 40-hour weeks and an hourly wage of $12. Overhead is 1.5 times weekly labor cost. Material cost is $6 per pound.
Week
Output (unit)
Workers
Materials (lbs)
1
30,000
6
450
2
33,600
7
470
3
32,200
7
460
4
35,400
8
480
Required:
a. Compute Multi-factor analysis for each week using labor, materials and overhead together
b. Single factor analysis for each week on labor and materials separately
c. What do analyses a & b indicate about the health of this process- is it gaining in productivity or not? If not, which of the factors seems to be the problem?
Week
Output (unit)
Workers
Materials (lbs)
1
30,000
6
450
2
33,600
7
470
3
32,200
7
460
4
35,400
8
480
Explanation / Answer
a)
b)
c) By the above analysis, we can see that Multifactor productivity is decreasing. So, the process is not gaining.
The main factor responsible is Labor as labor productivity is constantly decreasing in spite of learning effect. Material productivity is satisfactory as it is sometimes decreasing but increasing at a faster pace. So, Labor should be analysed for the reasons of fall in productivity.
Calculations A B C D = B x 40 x $12 E = C x $6 F = D x 1.5 G = D+E+F H = A / G Week Output (unit) Workers Materials (lbs) Wages Materials Overhead Total Inputs Multifactor productivity 1 30,000 6 450 2880 2700 4320 9900 3.0303 2 33,600 7 470 3360 2820 5040 11220 2.9947 3 32,200 7 460 3360 2760 5040 11160 2.8853 4 35,400 8 480 3840 2880 5760 12480 2.8365Related Questions
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