c. If instructors are going to work an average of 20 hours per week for 16 weeks
ID: 359342 • Letter: C
Question
c. If instructors are going to work an average of 20 hours per week for 16 weeks for each 3-credit class of 85 students, the labor productivity ratio is $ ____ per hour. (Enter your response rounded to two decimal places.)
Student tuition at Boehring University is $160 per semester credit hour. The state supplements school revenue by $100 per semester credit hour. Average class size for a typical 3-credit course is 50 students Labor costs are $4,700 per class, materials costs are $18 per student per class, and overhead costs are $26,000 per class. The multifactor productivity ratio currently is 1.23 and the labor productivity ratio is $174.11 per hour if the instructors work on an average of 14 hours per week for 16 weeks for each 3-credit class of 50 students. Coach Bjourn Toulouse led the Big Red Herrings to several disappointing football seasons. Only better recruiting will return the Big Red Herrings to winning form. Because of the current state of the program, Boehring University fans are unlikely to support increases in the $192 season ticket price. Improved recruitment will increase overhead costs to $30,000 per class section from the current $26,000 per class section. The university's budget plan is to cover recruitment costs by increasing the average class size to 70 students. Labor costs will increase to $7,000 per 3-credit course. Material costs will be about $25 per student for each 3-credit course. Tuition will be $225 per semester credit, which is supplemented by state support of $100 per semester credit. a. The multifactor productivity ratio with the university's plan to meet the expenses related to improving recruitment is(Enter your response rounded to two decimal places.)Explanation / Answer
a) Improved recruitment scenario
Value of output = 70 students * 3 credit hours * (225 tuition + 100 state support) = 68,250
Value of input = Labor cost + Material cost + Overhead cost =7000+25*70+30000 =38,750
Multifactor productivity = Output/Input = 68250/38750 =1.76
b). As compared to the present multifactor productivity ratio, the university's plan will result in ____an improved ______ multifactor productivity ratio.
c) Labor hours = 20*16 = 320 hours
Value of Output = 85 students * 3 credit hours * (225 tuition + 100 state support) = 82,875
Labor productivity = 82875/320 =$ ___258.98___ per hour
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