A Company that makes shopping carts for supermarkets and other stores recently p

Question

A Company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used 7 workers, who produced an average of 81 carts per hour. Workers receive $ 11 per hour, and machine coast was S38 per hour. With the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $12 per hour while output increased by four carts per hour. a) Compute the multifactor productivity (MFP) (labor plus equipment) under the After buying the new equipment. The MFP (carts/$) = b) Compute the % growth in productivity between the Prior to and after buying the new equipment. The growth in productivity = %

Explanation / Answer

Old Machine Labor Cost = 7 labors * $11/per hour = $77 Machine Cost per hour = $38 Total Factor Cost per hour = $77 + $38 = $115 Production Per Hour = 81 carts Multifactor Productivity = 81 carts / $115 = 0.7043 carts/$ New Machine Labor Cost = 6 labors * $11/per hour = $66 Machine Cost per hour = $50 ($38+$12) Total Factor Cost per hour = $66 + $50 = $116 Production Per Hour = 85 carts (81 + 4) Multifactor Productivity = 85 carts / $116 = 0.7328 carts/$ % growth in productivity = (0.7328 - 0.7043) / 0.7043 = 4.03%

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

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