High School

A dry cleaning store cleaned 650 items last month, consuming the following resources:

- Labor: 520 hours at $13 per hour
- Solvent: 100 gallons at $5 per gallon
- Machine rental: 20 days at $50 per day

What is the Multi-Factor Productivity?

Answer :

To calculate Multi-Factor Productivity (MFP), we need to divide the total output by the total input costs.

The formula for MFP is:

MFP = Output / (Labor Cost + Solvent Cost + Machine Rental Cost)

Given:

  • Labor Cost: 520 hours at $13 per hour = $6,760
  • Solvent Cost: 100 gallons at $5 per gallon = $500
  • Machine Rental Cost: 20 days at $50 per day = $1,000

Total input cost = $6,760 + $500 + $1,000 = $8,260

The total output (cleaned items) is 650 items.

MFP = 650 / 8260 ≈ 0.0787 items per dollar

Other Questions