Munson Performance Auto, Inc., modifies 375 autos per year. The manager, Adam Mu

Question

Munson Performance Auto, Inc., modifies 375 autos per year. The manager, Adam Munson, is interested in obtaining a measure of overall performance. He has asked you to provide him with a multifactor measure of last year's performance as a benchmark for future comparison.You have assembled the following data. Resource inputs were: labor, 10500 hours; 500 suspension and engine modification kits; and energy, 100000 kilowatt-hours. Average labor cost last year was $25 per hour, kits cost $1,000 each, and energy costs were $5 per kilowatt-hour. The overall performance at Munson Performance Auto, Inc. = autos/dollar of input (round your response to six decimal places).

Explanation / Answer

Labor cost = 10500 * 25 = $262,500

Kits cost = 500 * 1000 = $ 500,000

Energy costs = 100000* 5 = $500,000

Total cost = 262500 + 500000+500000 = $ 1262500

Overall performance = 375/1262500 = 0.0002970297 = 0.000297 autos/dollar of input (Rounded to 6 decimals)

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