Posted on by Judy

Hokey Min’s Kleen Karpet cleaned 75 rugs in October, consuming the following resources: Labor: Solvent Machine Rental: 520 hours at $15 per hour 100 gallons at $5 per gallon 22 days at $75 per day a) Labor productivity per dollar= 0.0096 rugs/dollar (round your response to four decimal places). b) Multifactor productivity ] rugs/dollar (round your response to four decimal places)

To be calculated:
(a) Labor productivity per dollar
(b) Multi-factor productivity
Given values:
Labor = 520 hours at $15 per hour
Solvent = 100 gallons at $5 per gallon
Machine rentals = 22 days at $75 per day
Solution:
(a) Labor productivity is calculated as;
Labour productivity = Number of rugs / Total labor cost
Labour productivity = 75 / (520 x 15) = 75 / 7800 = 0.0096
Labour productivity = 0.0096 rugs per dollar
(b) Multi-factor productivity is calculated as;
Multi-factor productivity = Number of rugs / (Total labor cost + Total solvent cost + Total machine rental cost)
Multi-factor productivity = 75 / [(520 x 15) + (100 x 5) + (22 x 75)]
Multi-factor productivity = 75 / (7800 + 500 + 1650)
Multi-factor productivity = 75 / 9950 = 0.0075
Multi-factor productivity = 0.0075 rugs per dollar
 
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