Question

U.S. manufacturing company operating a subsidiary in an LDC (less-developed country) shows the following results: U.S. LDC Sales (units) 98,000 19,980 Labor (hours) 20,600 15,600 Raw materials (currency) $ 19,950 19,750 (FC) Capital equipment (hours) 59,250 5,600 *Foreign Currency unit a. Calculate partial labor and capital productivity figures for the parent and subsidiary. (Round your answers to 2 decimal places.) b. Compute the multifactor productivity figures for labor and capital together. (Round your answers to 2 decimal places.) c. Calculate raw material productivity figures (units/$ where $1

Answer 1

a. Productivity = Sales /Labour Hour

U.S

Productivity = 98000 units/20600 hours

Productivity = 4.76

LDC

Productivity = 19980 units/15600 hours

Productivity = 1.28

Capital Productivity = Sales / Capital Equipment (Hours)

U.S

Capital Productivity = 98000 units/59250 hours

Capital Productivity = 1.65

LDC

Capital Productivity = 19980 units/5600 hours

Capital Productivity = 3.57

b. Multi-factor Productivity = Total Output (Sales) / (Labour Hours + Capital Equipment Hours)

U.S

Multi-factor Productivity = 98000 units/(20600+59250)

Multi-factor Productivity = 98000 units / 79850 hours

Multi-factor Productivity = 1.23

LDC

Multi-factor Productivity = 19980 units / (15600+5600)

Multi-factor Productivity = 19980 units / 21200 hours

Multi-factor Productivity = 0.94

c. Raw Material Productivity = Sales / Raw Materials Currency

U.S

Raw Material Productivity = 98000 units/$19950

Raw Material Productivity = 4.91

LDC

Raw Material Productivity = 19980 units / (19750 /10)

Raw Material Productivity = 19980 units / $1975

Raw Material Productivity = 10.12