Question

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 ​$31,000 per class section from the current ​$27,000 per class section. The​ university's budget plan is to cover recruitment costs by increasing the average class size to 85 students. Labor costs will increase to ​$7,200 per 3​-credit course. Material costs will be about ​$35 per student for each 3​-credit course. Tuition will be ​$200 per semester​ credit, which is supplemented by state support of ​$80 per semester credit.What is the multifactor productivity ratio? Compared to the result obtained in Problem 1, did productivity increase or decrease for the course process?

Answer 1

Answer:

Explanation:

a. Revenue from improving recruitment:

Tuition per semester labor hour is $200 per semester credit

Revenue from state = $80 per semester credit

Expenses from improving recruitment,

Labor cost = $7200

Material cost = $35 per student

Number of students per class = 85

So, Total material costs = 85 x 35 = $2975

Overhead costs = $31000

Output for 3 credit hour= number of students x revenue x credit hours

 = 85 x (200+80)x3 = $71400

Multifactor productivity related to improving recruitment= Output/(Labor cost+ material cost+ overhead)  = 71400/ (7200+2975+31000) = 71400/41175 = 1.734