The details of weekly output and imput for fabication process are follows: output is 400 units, with a standard selling price of $100 per unit. For the week, total labor costs are: 10 workers at 40 hours for the week, are paid $15 per hour. Total material costs for the 400 units are $5,000. Weekly overhead is charged at the rate of 1.5 times the labor costs. What is the multifactor productivity for the week?

The multifactor productivity for the week is 2  

Given that,  

Based on the above information, the calculation is as follows:

Total output = 400 × $100 = $40,000

Total labor cost = $15  × 10  × 40 = $6,000

Overhead = Total labor cost  × 1.5

= $6,000  × 1.5

= $9,000

Multi factor productivity = Total output ÷ (Total labor cost + Total material cost + Overhead)

= $40,000 ÷ ($6,000 + $5,000 + $9,000)

= $40,000 ÷$20,000

 = 2

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Multifactor productivity = 2

Explanation:

Given:

Total output = 400 units

Standard selling price = $100 per unit

Labor costs = $15 per hour

Number of workers = 10 workers

Number of hour = 40 hours per week

Total material costs = $5,000

Overhead = 1.5 times of (Total labor cost)

Calculation:

Total output = 400 x $100 = $40,000

Total labor cost = $15 x 10 x 40 = $6,000

Overhead = Total labor cost x 1.5 = $6,000 x 1.5 = $9,000

Multi factor productivity = Total output / (Total labor cost + Total material cost + Overhead)

= $40,000 / ($6,000 + $5,000 + $9,000)

= $40,000 / $20,000

Multifactor productivity = 2

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