A U.S. manufacturing company operating a subsidiary in an LDC (less-developed co
ID: 424226 • Letter: A
Question
A U.S. manufacturing company operating a subsidiary in an LDC (less-developed country) shows the following results Sales (units) Labor (hours) Raw materials (currency) Capital equipment (hours) U.S 19,900 59,700 LDC 20,300 14,900 106,000 $ 19,700 FC 19,900 4,900 Foreign Currency unit a. Calculate partial labor and capital productivity figures for the parent and subsidiary. (Round your answers to 2 decimal places.) U.S LDC Labor productivity Capital productivity b. Compute the multifactor productivity figures for labor and capital together. (Round your answers to 2 decimal places.) U.S LDC Multifactor productivity C. Calculate raw material productivity figures (units/$ where $1 = FC 10). (Round your answers to 2 decimal places.) U.S LDC Raw material productivityExplanation / Answer
Labour productivity in USA = Sales ( units ) / Labour ( hours ) = 106000/ 19900 = 5.33
Labour productivity in LDC = Sales ( units ) / Labour ( Hours ) = 20300/ 14900 = 1.36
Capital productivity in USA = 106000/59700 = 1.78
Capital productivity in LDC = 20300/ 4900 = 4.14
US
LDC
Labour productivity
5.33
1.36
Capital productivity
1.78
4.14
Multifactor productivity for US
= Sales ( units ) / Labour ( hours ) + Capital equipment ( hours )
= 106000 / ( 19900 + 59700 ) = 106000/ 79600 = 1.33
Multifactor productivity for LDC
= Sales ( units ) / Labour ( hours) + Capital equipment ( hours )
= 20300 / ( 14900 + 4900 )
= 20300 / 19800
= 1.0252 ( 1.03 rounded to 2 decimal places )
US
LDC
Multifactor productivity
1.33
1.03
Since $1 = FC 10
Therefore , FC 19900 = $1990
Raw material productivity
= Sales ( units ) / Raw material value ( in $)
Therefore ,
Raw material productivity for US = 106000/19700 = 5.38
Raw material productivity for LDC = 20300/ 1990 = 10.20
US
LDC
Raw material productivity
5.38
10.20
US
LDC
Labour productivity
5.33
1.36
Capital productivity
1.78
4.14
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