The Three Person Crew Worked Their Way Through the Neighborhood

question 9

Essay

The three person crew worked their way through the neighborhood, mowing lawns, edging, applying fertilizer and weed treatments where necessary and collecting all the clippings for use as mulch as part of their new green initiative. Their pricing scheme appears in Table A and the mix of orders and service costs appear in Table B:
a. What is their multifactor productivity for these orders in the prestigious Edmond Oaks neighborhood?
b. Which of the service combinations provided by them is the most productive service combination from a multifactor perspective?
c. What is their labor productivity for the same mix of orders?
Table A: Price List

Workers are paid at a rate of $10 per hour, and overhead is charged at 120% (or 1.2 times) labor costs. For a customer that gets both mowing and edging, their $95 bill would be discounted for two services times 5% for a total of 10% off the $95 straight charge for a cost of $85.50. A customer receiving three services would get a 15% discount off their service bill. Labor hours shown in Table A are total hours for the three-person crew.
Table B: Orders Processed

---

Definitions:

Budgeted Production

represents the amount of production planned for a future period as part of the budgeting process.

Standard Cost System

An accounting system that uses standard costs for cost control and decision making.

Materials Price Variance

The difference between the actual cost of materials and the expected cost at standard prices.

Direct Materials

The raw materials that are directly traceable to the production of a specific good or service.