Question

Hokey​ Min's Kleen Karpet cleaned 75 rugs in​ October, consuming the following​ resources: ​Labor: 520 hours at ​$17 per hour ​Solvent: 100 gallons at ​$5 per gallon Machine​ Rental: 20 days at ​$75 per day ​a) Labor productivity per dollar​ = 0.0085 ​rugs/dollar ​(round your response to four decimal​ places). ​b) Multifactor productivity​ = nothing ​rugs/dollar ​(round your response to four decimal​ places).

Answer 1

(a) 0.0085 rugs per dollar.

(b) 0.0069 rugs per dollar.

Step-by-step explanation:

We have been given that Hokey​ Min's Kleen Karpet cleaned 75 rugs in​ October, consuming the following​ resources: ​Labor: 520 hours at ​$17 per hour.

(a) To find the labor productivity per dollar, we will divide number of rugs by amount spent on labor.

`\text{Amount spent on labor}=\text{520 hours}* \frac{\$17}{\text{Hour}}=\$8,840`

`\text{Labor productivity per dollar}=\frac{75\text{ rugs}}{\$8,840}`

`\text{Labor productivity per dollar}=\frac{0.0084841628959\text{ rugs}}{\$}`

`\text{Labor productivity per dollar}\approx \frac{0.0085\text{ rugs}}{\$}`

Therefore, the labor productivity is 0.0085 rugs per dollar.

(b) To find the multi-factor productivity, we will divide number of rugs by total cost or expenses.

`\text{Cost of solvent}=100\text{ gallons}* \frac{\$5}{\text{ gallons}}=\$500`

`\text{Machine rental}=20\text{ days}* \frac{\$75}{\text{day}}=\$1500`

`\text{Total expenses}=\text{Labor cost+Solvent cost+Machine rental}`

`\text{Total expenses}=\$8,840+\$500+\$1500`

`\text{Total expenses}=\$10,840`

`\text{Multi-factor productivity per dollar}=\frac{75\text{ rugs}}{\$10,840}`

`\text{Multi-factor productivity per dollar}=\frac{0.006918819\text{ rugs}}{\$}`

`\text{Multi-factor productivity per dollar}\approx \frac{0.0069\text{ rugs}}{\$}`

Therefore, the multi-factor productivity is 0.0069 rugs per dollar.