Answer:
a. Labor productivity is 16.67 per hour
b. Multifactor productivity = 0.93
Explanation:
a.
Number of guitars produced = 100
Guitars good enough to sell = 80%
Number of guitars good enough to sell = 80% * 100 = 80 guitars.
Selling per price = 250
Labour hours per guitar = 12 hours
Value of output = 250 * 80 = 20.000
input in labor hourse = guitars produced * labors per guitar = 100 * 12 = 1200 hours
Labor productivity = output/input = 20.000 / 1.200 = 16.67 per hour
Therefore, labor productivity is 16.67 per hour
b.
labor cost = 11 per hour
material cost= 42 per guitar
overhead cost = 4.000
total labor cost = guitars produced* labor cost per hour*labor hours per guitar
= 100*11*12
=13.200
Total material cost = guitars produced * material cost per guitar = 100 * 42 = 4.200
Multifactor productivity = output / labour cost + material cost + overhead cost
Multifactor productivity = 20.000 / (13200 + 4200 + 4000)
Multifactor productivity = 20.000 / 21.400
Multifactor productivity = 0.93
