Question

A paint manufacturing company has three factories located in France, Germany, and Spain. The productivity data of the factories are as follows: Factory Location Amount of PaintTotal Input Cost (USD) Produced (U.S. Gallons) Spain Germany France 4,600,000,000 5,500,000,000 4,000,000,000 $5,250,000 $5,250,000 $3,500,000 Based on the productivity analysis of all the factories, the productivity of the factory in: a. Germany is lower than that of the factory in Spain. b. Spain is higher than that of the factory in France. c. France is higher than that of the factory in Spain. d. France is lower than that of the factory in Germany

Answer 1

Option (c) is correct.

Step-by-step explanation:

France:

Production cost per unit:

= Amount of paint produced ÷ Total input cost

= 4,000,000,000 ÷ $3,500,000

= 1142.85714286

Productivity:

= Production cost per unit ÷ Amount of paint produced

= 1142.85714286 ÷ 4,000,000,000

= 0.0000028571

Germany:

Production cost per unit:

= Amount of paint produced ÷ Total input cost

= 5,500,000,000 ÷ $5,250,000

= 1047.61904762

Productivity:

= Production cost per unit ÷ Amount of paint produced

= 1047.61904762 ÷ 5,500,000,000

= 0.00000019048

Spain:

Production cost per unit:

= Amount of paint produced ÷ Total input cost

= 4,600,000,000 ÷ $5,250,000

= 876.19047619

Productivity:

= Production cost per unit ÷ Amount of paint produced

= 876.19047619 ÷ 4,600,000,000

= 0.00000019048

France is higher than that of the factory in Spain.