Munson Performance Auto Inc modifies 375 autos per year The

Munson Performance Auto, Inc., modifies 375 autos per year. The manager, Adam Munson, is interested in obtaining a measure of overall performance. He has asked you to provide him with a multifactor measure of last year\'s performance as a benchmark for future comparison.You have assembled the following data. Resource inputs were: labor, 10500 hours; 500 suspension and engine modification kits; and energy, 100000 kilowatt-hours. Average labor cost last year was $25 per hour, kits cost $1,000 each, and energy costs were $5 per kilowatt-hour. The overall performance at Munson Performance Auto, Inc. = autos/dollar of input (round your response to six decimal places).

Solution

Labor cost = 10500 * 25 = $262,500

Kits cost = 500 * 1000 = $ 500,000

Energy costs = 100000* 5 = $500,000

Total cost = 262500 + 500000+500000 = $ 1262500

Overall performance = 375/1262500 = 0.0002970297 = 0.000297 autos/dollar of input (Rounded to 6 decimals)