Question

Hokey Mins Kleen Karpet cleaned 85 rugs in October, consuming the following resources: Labor: Solvent: Machine Rental: 525 h
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Answer #1

The total number of carpets cleaned in October = 85 rugs

The total number of labor hours used = 525 hours

The hourly labor cost = $17

The total labor cost = The total number of labor hours used * The hourly labor cost

= 525 * 17

= $8925

The total amount of solvent used = 100 gallons

The cost per gallon of solvent = $8

The total solvent cost = The total amount of solvent used * The cost per gallon of solvent

= 100 * 8

= $800

The total number of days that the machine was rented = 22 days

The cost per day of machine = $60

The total machine rental cost = The total number of days that the machine was rented * The cost per day of machine

= 22 * 60

= $1320

The total cost of cleaning the carpets = The total labor cost + The total solvent cost + The total machine rental cost

= 8925 + 800 + 1320

= $11045

Ans a)

Labor productivity = The total number of carpets cleaned in October / The total labor cost

= 85 / 8925

= 0.0095 rugs per dollar

Ans b)

Multifactor productivity = The total number of carpets cleaned in October / The total cost of cleaning the carpets

= 85 / 11045

= 0.0077 rugs per dollar

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