Robert electric company produces electric bulbs of 40 W, 60W and 100 W. The week

Question

Robert electric company produces electric bulbs of 40 W, 60W and 100 W. The weekly production of these bulbs is 5,0000 10,000 and 15,000 bulbs respectively. The company employs 5 workers in a standard 40 h hour/week schedule. The employee cost is $10/hour. A production of 1000 bulbs (irrespective of type) requires materials worth $200, In addition, the factory incurs a fixed cost of $6000/week. The standard selling price of 100 bulbs is $30, $40,and $60, respectively.

what is the multifactor productivity ?

Explanation / Answer

Total Production = 5000 + 10000 + 15000 = 30000 units Cost Calculation Material Cost (30000 bulbs/1000 * $200 per 1000 bulbs) $6,000 Labor Cost (5 labors/week * 40 hours/week * $10 per hour) $2,000 Fixed Costs $6,000 Total Cost $14,000 Multifactor Productivity = Output/Cost of all Inputs = 30000 bulbs/$14000 = 2.1429 units of output per dollar of input cost

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