Concept explainers
A
Interpretation: average costs based on the provided multifactor ratio is to be calculated.
Concept Introduction: The multifactor productivity enables an organization to identify how effective their processes are as it computes and involves all the costs involved in the production process.
B
Interpretation: A’s labor productivity ratio for each type of cake is to be calculated.
Concept Introduction: The labor productivity enables an organization to identify how effective their processes are as it computes and involves all the costs involved in the production process.
C
Interpretation: The most prospective item as per the labor productivity ratio.
Concept Introduction: Labor productivity ratio computes the productivity of the workforce, this measures the number of units produced within an hour. This is used to identify how efficient the workforce is.
D
Interpretation: Based on the multifactor calculations, the product to be discontinued is to be determined.
Concept Introduction: The multifactor productivity enables an organization to identify how effective their processes are as it computes and involves all the costs involved in the production process.
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- Barry’s Tire Service completed 100 tire changes, six brake jobs, and 16 alignments in an eight-hour day with his standard crew of six mechanics. A brake specialist costs $16 per hour, a tire changer costs $8 per hour, an an alignment mechanic costs $14 per hour. The materials cost for days was $2,000, and overhead cost was $500. What is the shop’s labor productivity if the retail price for each respective service is $60, $150, and $40? What is the multifactor productivity, if the crew consisted of two of each type mechanicarrow_forwardGiven the following information, calculate the multifactor productivity in terms of revenue per multifactor cost. (In other words, use money in the numerator and denominator.)Units produced: 5,000Standard price: $30/unitLabor input: 500 hoursCost of labor: $25/hourCost of materials: $5,000Cost of overhead: 2x labor costA) State the formulaB) Determine the unit of measure for the numeratorC) Determine the unit of measure for the denominatorD) Calculate ProductivityD) Interpret the resultsarrow_forwardKleen Karpets cleaned 5000 square feet of rugs last month, consuming 400 hours of labor at $10 per hour, 100 gallons of solvent at $5 per gallon, and 20 days of machine rental at $25 per day. What is the multifactor productivity for the month as measured by square feet of rugs per dollar spent?arrow_forward
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- 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 Processed / Day A 3 36 В 6. 44 C 6. 58 D 32 Click here for the Excel Data File 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.) Multifactor Productivity (customers per day per worker) (customers per dollar input) Labor Productivity Unit A В Carrow_forwardPosey Ceramics makes ceramic vases for a chain of de-partment stores. The output and cost figures over the past four weeks are shown here. Labor costs $10 an hour, and materials are $4 a pound. Calculate the (a) labor produc-tivity (in hrs), (b) material productivity (in lbs), and (c) multifactor productivity for each week. Comment on theresults. Week 1 2 3 4Units of output 2000 4000 5000 7000No. of workers 4 4 5 6Hours per week per worker 40 48 56 70Material (lbs) 286 570 720 1000arrow_forwardA company is able to produce 2,350 units of product A monthly. This level of production requires spending $1,000 on labor, $520 on materials, and $2,000 on overhead expenses. Calculate the multifactor productivity. Assuming the company can increase its production to 2,850 units, following an increase of materials expenses to $960, and labor expenses to 1,240. Is it worthy to increase the production level? Justify.arrow_forward
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