Question

It takes the Kwinzee shipyard six months (1 month = 4 weeks) with 500 workers to build a small tanker. Material costs are $32 million and overhead costs are $2 million. Workers cost $40 per hour including benefits and work 40 hours per week. The ship sells for $75 million. What is the multifactor productivity ratio? (assuming that the output is measured by its value)

Answer 1

Answer:

1.37

Explanation:

Kwinzee shipyard multifactor productivity ratio

500 workers x 40 per hour x 40 hours per week x 26 numbers of week

= 20,800,000

Production cost = 32,000,000

Overhead = 2,000,000

=20,800,000+32,000,000+2,000,000

=54,200,000

Sales price = 75,000,000

Hence:

75,000,000/54,200,000

= 1.37

Therefore multi-factor productivity ratio will be 1.37