The Weekly Output of a Fabrication Process Is Shown Below

question 23

Multiple Choice

The weekly output of a fabrication process is shown below, together with data for labor and material inputs. Standard selling price is $125 per unit. Overhead is charged weekly at the rate of $1,500 plus .5 times direct labor cost. Assume a 40-hour week and an hourly wage of $16. Material cost is $10 per foot. What is the average multifactor productivity? $$\begin{array} { l c c c } \text { Week } & \text { Output } & \text { \# Workers } & \text { Material (ft) } \\\hline 1 & 392 & 5 & 2720 \\2 & 408 & 6 & 2790\end{array}$$

• A) 1.463
• B) 1.457
• C) 1.431

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Definitions:

Peak Efficiency

The state of operating at maximum productivity with minimal waste and expense.

American Business Firms

Companies operating in the United States, engaged in commercial, industrial, or professional activities.

Product Differences

Variations among products that make one product distinct from another in the eyes of consumers, often used as a competitive advantage.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded, typically sloping downwards from left to right.