Question

"A cleaning company uses $10 of chemicals, $40 of labor, and $5 of misc. expenses for each house it cleans. After some quality complaints, the company has decided to increase its use of chemicals by 50%. By what percentage has multifactor productivity fallen?

Answer 1

Answer:

multifactor productivity = 8.3%

Explanation:

given data

Total cost for chemicals = $10

Total cost of labor = $40

Total cost of misc = $5

use of chemical = 50%

solution

first we get here total initial cost that is

total initial cost  = 10 + 40 + 5

total initial cost = $55

and

Increase in cost of chemical is = 10 + (0.5) × (10)  

Increase in cost of chemical = 15

so Total increase in cost will be

Total increase in cost = $15 + $40 + $5

Total increase in cost = 60

so

increase in cost % = $\frac{initial\ cost}{incresed\ cost}$  × 100

increase in cost % = $\frac{55}{60}$  × 100  

increase in cost % = 91.67 %

so

change in multifactor productivity is  = 100% - 91.7%

multifactor productivity = 8.3%