Question

The first part of the question is answered but if you could please explain and answer both parts

Student tuition at Boehring University is ​$150 per semester credit hour. The state supplements school revenue by ​$90 per semester credit hour. Average class size for a typical 3​-credit course is 50 students. Labor costs are ​$4 comma 400 per​ class, materials costs are ​$22 per student per​ class, and overhead costs are ​$27 comma 000 per class. The multifactor productivity ratio currently is 1.11 and the labor productivity ratio is ​$160.71 per hour if the instructors work on an average of 14 hours per week for 16 weeks for each 3​-credit class of 50 students.

Coach Bjourn Toulouse led the Big Red Herrings to several disappointing football seasons. Only better recruiting will return the Big Red Herrings to winning form. Because of the current state of the​ program, Boehring University fans are unlikely to support increases in the​ $192 season ticket price. Improved recruitment will increase overhead costs to ​$30 comma 000 per class section from the current ​$27 comma 000 per class section. The​ university's budget plan is to cover recruitment costs by increasing the average class size to 75 students. Labor costs will increase to ​$7 comma 000 per 3​-credit course. Material costs will be about ​$35 per student for each 3​-credit course. Tuition will be ​$200 per semester​ credit, which is supplemented by state support of ​$90 per semester credit.

a. The multifactor productivity ratio with the​ university's plan to meet the expenses related to improving recruitment is

1.65. ​(Enter your response rounded to two decimal​ places.)

As compared to the present multifactor productivity​ ratio, the​ university's plan will result in

▼

a reduced

an improved

multifactor productivity ratio.

you have to choose reduced or improved for the second part please if you can answer both parts first part answer is 1.65 but I need explanation

Answer 1

Updated Overhead Cost = 30000

Updated Class Size = 75

Updated Labor Cost = 7000

Material Cost = 35*75 = 2625

Input = Overhead cost + Labor Cost + Material Cost = 30000+7000+2625 = 39625

Tution Charge = 200 per credit

State Suport = 90 per credit

Total Credit = 3 per student

Total Credit = 75*3 = 225

Output = Credit*(Tuition Charge+State Support)

Output = 225*(200+90)

Output = 65250

Multifactor Productivity = Output / Input

Multifactor Productivity = 65250/39625

Multifactor Productivity = 1.6567

Multifactor Productivity = 1.65

Earlier Multifactor Productivity = 1.11 (given in question)

Since updated multifactor productivity 1.65 is greater than earlier multifactor productivity 1.11, hence we can conclude that university's plan will result in an improved multifactor productivity.

It means for each dollar of input (cost), output is greater (1.65) in updated plan than earlier 1.11.