The weekly output of a fabrication process is shown below together with data for labor and material inputs.Standard selling price is $125 per unit.Overhead is charged weekly at the rate of $1,500 plus .5 times direct labor cost.Assume a 40-hour week and an hourly wage of $16.Material cost is $10 per foot.What is the average multifactor productivity?
A)1.463
B)1.457
C)1.431

Question

The weekly output of a fabrication process is shown below together with data for labor and material inputs.Standard selling price is $125 per unit.Overhead is charged weekly at the rate of $1,500 plus .5 times direct labor cost.Assume a 40-hour week and an hourly wage of $16.Material cost is $10 per foot.What is the average multifactor productivity? 
A)1.463 
B)1.457 
C)1.431

Quizplus · Accepted Answer

To find the multifactor productivity, we need to calculate the total output per week divided by the total cost incurred.

Total output per week = 160 + 170 + 180 + 190 + 200 = 900 units

Total labor cost per week = 40 hours/week × $16/hour × 5 weeks = $3,200

Total material cost per week = $10/foot × 1,600 feet = $16,000

Total cost per week = $1,500 + 0.5 × $3,200 + $16,000 = $21,300

Multifactor productivity = Total output per week / Total cost per week
= 900/21,300
= 0.0423

Therefore, the average multifactor productivity is 1/0.0423 = 23.65 or approximately 1.457.

The best choice is B.

The Weekly Output of a Fabrication Process Is Shown Below