For the month of February a furniture manufacturer was able

For the month of February, a furniture manufacturer was able to produce 65 king size beds. He utilized three prime resources: workforce (520 hours for $13 per hour), raw material (100 logs for $5 per log) and equipment (20 days for $50 a day). Calculate multifactor productivity. (provide the answer with six decimal places) Your Answer: | Answer

Solution

Cost of workforce = Number of hours x Hourly wage rate

= 520 x $13

= $ 6,760

Cost of raw materials = Quantity x Rate

= 100 x $5

= $500

Cost of equipment = Number of days x Rate per day

= 20 x $50

= $ 1,000

So, Total cost = Cost of workforce + Cost of raw materials + Cost of equipment

= $ 6,760 + $500 + $ 1,000

= $8,260

Multifactor productivity

= Output / Total cost of Input

= 65 / $8,260

= 0.007869 per dollar of Input