Question

The weekly output of a fabrication process is shown below, together with data for labor and material inputs. Standard selling price is $125 per unit. Overhead is charged weekly at the rate of $1,500 plus. 5 times direct labor cost. Assume a 40-hour week and an hourly wage of $16. Material cost is $10 per foot. What is the average multifactor productivity?.

Answer 1

From the weekly output given, the average multifactor productivity will be 1.447.

How to calculate the average multifactor productivity

From the complete information, the following can be deduced:

Week 1:

Input cost = 35660

Output cost = 51500

Week 2:

Input cost = 31800

Output cost = 45500

Week 3:

Input cost = 33500

Output cost = 49000

Week 4:

Input cost = 35160

Output cost = 51000

Total input cost:

= 35660 + 31800 + 33500 + 35160

= 136120

Total output cost:

= 51500 + 45509 + 49000 + 51000

= 197000

Average multifactor productivity

= Output / Input.

= 197000 / 136120

= 1.447

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