Question

Charles lackey operates a bakery in Idaho, Falls Because of its excellent product location, demand has increased by 35% in the last year. On far too many occasions, customers have not been able to purchase the bread of their choice. Because of the size of the store, no new ovens can be added. At a staff meeting, one employee suggested ways to load the ovens differently so that more loaves of bread can be backed at one time. this new process will require that the ovens be loaded by hand, requiring additional manpower. This is the only production change that will be made in order to meet the increased demand. The bakery currently makes 1,800 loaves per month. Employees are paid $8.00 per hour. In addition to the labor cost, Charles has a constant utility cost per month of $800 and a per loaf ingredient cost of $0.40.

current multifactor productivity for 640 work hours per month=

Answer 1

To calculate the current multifactor productivity, divide the number of loaves produced per month by the total input, which includes labor cost and utility cost.

Step-by-step explanation:

The current multifactor productivity can be calculated by dividing the output by the total input. In this case, the output is the number of loaves produced per month, which is 1,800. The total input includes the labor cost and the utility cost. Assuming there are 640 work hours per month, the labor cost is 640 hours multiplied by $8.00 per hour. The utility cost remains constant at $800 per month. So the total input would be the sum of the labor cost and the utility cost. Finally, divide the output by the total input to calculate the current multifactor productivity.