Question

Last week, your regular process created 529 coats and consumed 2480 yards of material. Given the following data, calculate the multifactor productivity. (Keep four decimal places)

Overhead: $1400 plus 65% of the direct labor cost

Labor: 35.3 hours last week

Labor cost $16.20 per hour

Material cost $10.20 per yard

Answer 1

Cost of material

= Material consumed x Rate of material

= 2480 yards x $10.20 per yard

= $25,296

Labor Cost

= Number of hours worked x Labor cost per hour

= 35.3 hours x $16.20 per hour

= $571.86

Overhead

= $1,400 + 65% of Direct labor cost

= $1,400 + 65% of $571.86

= $1,771.71

Total cost

= Material cost + Labor cost + Overhead

= $25,296 + $571.86 + $1,771.71

= $27,639.57

Multifactor productivity

= Output / Input

= 529 / $27,639.57

= 0.0191 coats per dollar of input