Question

As part of a study for the Department of Labor Statistics, you are assigned the task of evaluating the improvement in productivity of small businesses Data for one of the small businesses you are to evaluate is shown below. The data are the monthly average of last year and the monthly average this year. Labor $12 per hour Capital 0.88% per month of investment; Energy $0.40 per BTU. Click the icon to view the data for one of the small businesses you are to evaluate. a) Determine the multifactor productivity with dollars as the common denominator for last year. dozen/$. (Round your response to The multifactor productivity with dollars as the common denominator for last year is three decimal places.) i More Info Production (dozen) Labor (hours) Capital investment ($) Energy (BTU) LAST YEAR 1,300 330 13,000 3,300 THIS YEAR 1,300 305 15,000 3,100 Print Done Enter OT DON CITTO TITUERUNGEN

Answer 1

Solution:

Labor: $12/hr

Capital expense: 0.88%/month of investment

Energy: $0.40 per BTU

Last year: Total Cost = Labor cost + resin cost + capital cost + energy cost

= (12 * 330 + 0.88 * 13000 + 0.40 * 3300) = 16,720

Last year, the total cost for one month = $16,720

This year: Total cost = (12 * 305 + 0.88 * 15000 + 0.40 * 3100) = 18,100

New productivity: [{(1300/18,100) - (1300/16,720)}] / (1300/16,720) = [(0.07182 - 0.07775) / 0.07775] = -7.6243%

Thus 7.6243% decrease in productivity from one month last year compared with one month this year

7.6243% * 1300 = 99.116