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The weekly output of a fabrication process is shown below together with data for labor and material inputs. Standard selling price is $100 per unit. Overhead is charged weekly at the rate of $2000. Assume a 40-hour week and an hourly wage of $14. Material cost is $8 per foot.
Week Output # Workers Material (feet)
1 420 6 1000
2 375 5 1000
a. (1) What is the Multifactor Productivity for Week 1 and Week 2?
b. (1) What is the Labor productivity for Week 1 and Week 2?
c. (1) Is the business Better Off or Worse Off in Week 2? Why or Why not?
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