Question

A hamburger factory produces 70,000 hamburgers each week. The equipment used costs $13,000 and will remain productive for four years. The labor cost per year is $13,000. What is the productivity measure of "units of output per dollar of input" averaged over the four-year period?

Answer 1

224 units of output per dollar of input

Step-by-step explanation:

The computation is shown below:

Productivity measures = (Total units produced) ÷ (Total labor cost + Total equipment cost)

where,

Total units produced is

= 70,000 × 52 weeks in a year × 4 years

= $14,560,000

Total units produced

= $13,000 × 4 years

= $52,000

And, the cost of equipment is $13,000

So, the productivity measures is

= ($14,560,000) ÷ ($52,000 + $13,000)

= 224 units of output per dollar of input