Problem 8 Question Help Mariah Enterprises makes a variety

Problem 8 Question Help * Mariah Enterprises makes a variety af consumer lectronic products. Its camara manufacturing plant is considering choosing between two different processes, named Alpha and Beta, which can be used to make a component part. To make the corract dacision, the managers would like to compare the labor and multifactor productivity of process Alpha with that of process Beta. The value of procass output for Alpha and Beta is S190 per unit of product A and 3130 per unit of product B, and tha corresponding overhead costs for Alpha and Beta are $8,000 and $6,000, respectively. 6 Process Alpha Process Beta units) 120 $2.500 30 Labor (S) Materials (S) $1,200 $1,400 $1,000 S2 000 S3,500 $2,500 $1.500 S1.400 a. Which process, Alpha or Beta, is more productive? Proccs ; has % higher labor productivity Pracess has higher multi adar productivity Enter your responses rounded ia the n asf whale number

Solution

Labor productivity of process Alpha = Total value of output A and B / Total labor cost of A and B

= (80*190+30*130)/(1200+1400)

= 7.346

Labor productivity of process Beta = Total value of output A and B / Total labor cost of A and B

= (70*190+60*130)/(1000+2000)

= 7.033

Multifactor productivity of process Alpha = Total value of output A and B / Total cost (labor + materials + overhead) of A and B

= (80*190+30*130)/(1200+1400+3500+2500+8000)

= 1.1506

Multifactor productivity of process Beta = Total value of output A and B / Total cost (labor + materials + overhead) of A and B

= (70*190+60*130)/(1000+2000+1500+1400+6000)

= 1.7731

Labor productivity of Alpha higher than Beta = (7.346-7.033)/7.033 = 4 % higher than that of Beta

Labor productivity of Beta higher than Alpha = (1.7731-1.1506)/1.1506 = 54 % higher than that of Alpha

Process Alpha has 4 % higher labor productivity

Process Beta has 54 % higher multifactor productivity