Question

A process has an output per day of 7,040 units. the inputs to produce this are labor $1000, materials $520; and overhead $2000. what is the productivity?

Answer 1

The multifactor productivity can be calculated using the the units produced and the total costs.
Units = 7040
Total costs = 1000 + 520 + 2000
Total costs = $3,520 

Multifactor productivity = 7,040 / 3,520
Multifactor productivity = 2 units per dollar