Question

Student tuition at Boehring University is $160 per semester credit hour. The state supplements school revenue by $100 per semester credit hour. Average class size for a typical 3 -credit course is 50 students. Labor costs are $4 comma 500 per class, materials costs are $18 per student per class, and overhead costs are $24 comma 000 per class. The multifactor productivity ratio currently is 1.33 and the labor productivity ratio is $174.11 per hour if the instructors work on an average of 14 hours per week for 16 weeks for each 3 -credit class of 50 students.

Coach Bjourn Toulouse led the Big Red Herrings to several disappointing football seasons. Only better recruiting will return the Big Red Herrings to winning form. Because of the current state of the program, Boehring University fans are unlikely to support increases in the $192 season ticket price. Improved recruitment will increase overhead costs to $30 comma 000 per class section from the current $24 comma 000 per class section. The university's budget plan is to cover recruitment costs by increasing the average class size to 70 students. Labor costs will increase to $6 comma 300 per 3 -credit course. Material costs will be about $25 per student for each 3 -credit course. Tuition will be $225 per semester credit, which is supplemented by state support of $100 per semester credit.

a. The multifactor productivity ratio with the university's plan to meet the expenses related to improving recruitment is __.

Answer 1

The answer is as follows:

Multifactor Productivity =Output/input

Output = 3 Credit course for 70 students

Input =Labour +material +OH

          =$6300+$25 per student per class +$30000

         =$6300+$25 *70+$30000

         =$6300+$1750+$30000

        =$38050

Total Output =3 credit hrs for 70 students

     Since the cost is $160/semester /credit hrs+ $100 per semester /credit hrs

                   =$260*3*70

                  =$54600

Multifactor Productivity =$54600/$38050

                                       =1.43