It Takes the Blacksburg Shipyard Twenty Six Weeks with 500

question 51

Multiple Choice

It takes the Blacksburg shipyard twenty six weeks with 500 workers to build a small tanker. Material costs are $32 million and overhead costs are $2 million. Workers cost $40 per hour including benefits and work 40 hours per week. The ship sells for $75 million. What is the multifactor productivity ratio?

• A) less than 1.0
• B) greater than 1.0 but less than or equal to 2.0
• C) greater than 2.0 but less than or equal to 3.0
• D) greater than 3.0

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Definitions:

Indirect Material

Materials used in the manufacturing process that are not directly incorporated into the final product, such as lubricants and cleaning supplies.

Direct Labor

The labor costs directly associated with the manufacturing of products, including wages of workers who are actively involved in the product's creation.

Direct Materials

Raw materials that can be directly attributed to the production of a product and are an essential part of the finished product.

Factory Overhead

All indirect costs incurred during the manufacturing process, excluding the costs of direct labor and materials.