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What is the multifactor productivity of the current process

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Question: The Abco Company manufactures electrical assemblies. The current process uses 10 workers and produces 200 units per hour. You are considering changing the process with new assembly methods that increase output to 300 units per hour, but will require 14 workers. Particulars are as follows:

                                                     CURRENT PROCESS                  NEW PROCESS

OUTPUT (UNITS / HOUR)                   200                                   300

NUMBER OF WORKERS                        10                                     14      

MATERIAL COST / HOUR                  $120                                  $150       

Workers are paid at a rate of $10 per hour, and overhead is charged at 140% (or 1.4 times) labor costs. Finished switches sell for $20 / unit.

Use the information provided in Table. What is the multifactor productivity of the current process?

Reference no: EM131554258

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