Answer :
To calculate the multi-factor productivity rate for the dry cleaning company, we need to determine the output and input values for the production process.
In this case, the output is the number of rugs cleaned, which is 65. The inputs are labor, solvent, and machine rental.
The total cost of labor is:
520 hours * $15 per hour = $7,800
The total cost of solvent is:
100 gallons * $4 per gallon = $400
The total cost of machine rental is:
20 days * $50 per day = $1,000
The total input cost is:
$7,800 + $400 + $1,000 = $9,200
Therefore, the multi-factor productivity rate is:
Multi-factor productivity rate = Output / Input
Multi-factor productivity rate = 65 / $9,200
Multi-factor productivity rate = 0.00707
Rounded to four decimal places, the multi-factor productivity rate for the dry cleaning company is 0.0071. This means that for every dollar of input resources, the company generates 0.71 cents of output.
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