A company offers ID theft protection using leads obtained from client banks. Thr

Question

A company offers ID theft protection using leads obtained from client banks. Three employees work 40 hours a week on the leads, at a pay rate of $20 per hour per employee. Each employee identifies an average of 3,300 potential leads a week from a list of 5,400. An average of 7 percent of potential leads actually sign up for the service, paying a one-time fee of $85. Material costs are $1,100 per week, and overhead costs are $9,000 per week.

Calculate the multifactor productivity for this operation in fees generated per dollar of input.

A company offers ID theft protection using leads obtained from client banks. Three employees work 40 hours a week on the leads, at a pay rate of $20 per hour per employee. Each employee identifies an average of 3,300 potential leads a week from a list of 5,400. An average of 7 percent of potential leads actually sign up for the service, paying a one-time fee of $85. Material costs are $1,100 per week, and overhead costs are $9,000 per week.

Explanation / Answer

Possible leads: 3,300

No. of workers: 3

Fee: $85

Conversion percentage: 0.07

Labor costs: 3 × 40 × $20

Material costs: $1,100

Overhead costs: $9,000

MFP=

[Possible leads × No. of workers × Fee × Conversion percentage]

÷

                  [Labor costs + Material costs + Overhead costs]

MFP= (3,300 × 3 × $85 × 0.07) / (3×40×$20 + $1100 + $9000)

=        $58905 / $12500

       = $4.71

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.