The Big Brother Box (3B) produces packing boxes for the local vegetable farms. Currently, they are making 500 boxes per day, in two 8-hour shifts (250 boxes per shift). The company has introduced some moderate changes in equipment, and conducted appropriate employee training, so that production levels have risen to 330 boxes per shift. Labor costs average $10 per hour for each of the 5 full-time workers on each shift. Capital costs were previously $3000 per day, and rose to $3900 per day with the equipment modifications. Energy costs were unchanged by the modifications, at $460 per day. What is the 3B's multifactor productivity after the changes?
The Big Brother Box (3B) produces packing boxes for the local vegetable farms. Currently, they are making 500 boxes per day, in two 8-hour shifts (250 boxes per shift). The company has introduced some moderate changes in equipment, and conducted appropriate employee training, so that production levels have risen to 330 boxes per shift. Labor costs average $10 per hour for each of the 5 full-time workers on each shift. Capital costs were previously $3000 per day, and rose to $3900 per day with the equipment modifications. Energy costs were unchanged by the modifications, at $460 per day. What is the 3B's multifactor productivity after the changes?
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter4: Extent (how Much) Decisions
Section: Chapter Questions
Problem 3MC
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