Answer:
1) $0.27 per loaf of bread
2) $0.28 per loaf of bread
3) 3.7%
Explanation:
current production = 1,800 loaves per month
current labor expense = $8 per hour
constant utility cost = $800
ingredients per loaf = $0.40
multi-factor productivity = total output / (labor + materials + overhead)
current multi-factor productivity = 1,800 loaves / ($5,120 + $800 + $720) = $0.27 per loaf of bread
new output level = 1,800 x 1.35 = 2,430 loaves
new multi-factor productivity = 2,430 loaves / ($6,912 + $800 + $972) = $0.28 per loaf of bread
% increase = ($0.28 - $0.27) / $0.27 = 3.7%
