Answer the following questions using the information below: Nicolt Company produced 120,000 sport jackets during 2015 and 480,000 direct manufacturing labor-hours were used at $2 per hour.The conversion costs were $1.2 per jackets produced.
-What is the total factor productivity for Nicolt Company?

Question

Quizplus · Accepted Answer

Total factor productivity is calculated as the ratio of total output to total input costs. The total output is 120,000 jackets. The total input cost includes labor costs (480,000 hours * $2/hour = $960,000) and conversion costs (120,000 jackets * $1.2/jacket = $144,000). Total input cost = $960,000 + $144,000 = $1,104,000. Total factor productivity = 120,000 jackets / $1,104,000 = 0.109 units of output per dollar.

Answer the Following Questions Using the Information Below: Nicolt Company