A cleaning company uses $10 of chemicals, $40 of labor, and $5 of misc. expenses for each house it cleans. After some quality complaints, the company has decided to increase its use of chemicals by 50%. By what % has multifactor productivity fallen?
A) 0%
B) 8.3%
C) 25%
D) 50%
E) none of the above or unable to determine

Question

Quizplus · Accepted Answer

The original cost per house is $55 ($10 + $40 + $5). Increasing chemicals by 50% adds $5, making the new cost $60. The productivity decrease is ($60 - $55) / $60 = 8.3%.

A Cleaning Company Uses $10 of Chemicals, $40 of Labor