Davis Company produced 159,000 sport jackets during 2015 and 530,000 direct manufacturing labor hours were used...

Davis Company produced 159,000 sport jackets during 2015 and 530,000 direct manufacturing labor hours were used at $3 per hour. The conversion costs were $1.20 per jackets produced. What is the total factor productivity for Davis Company?

a. 2.500 units of output per dollar

b. 0.300 units of outpur per dollar

c. 0.298 units of output per dollar

d. 0.089 units of output per dollar

Solutions

Expert Solution

d. 0.089 units of output per dollar

Working:

Cost of direct labor hours	=	Direct Labor hours		x	Labor rate
	=	5,30,000		x	$ 3.00
	=	$ 15,90,000

Conversion Cost	=	Units produced		x	Conversion cost per unit
	=	1,59,000		x	$ 1.20
	=	$ 1,90,800

Total cost of Manufacturing	=	$ 15,90,000	+	$ 1,90,800
	=	$ 17,80,800

Total factor productivity for Davis Company	=	Total units manufactured/Total manufcaturing cost
	=	1,59,000	/	$ 17,80,800
	=	$ 0.089	units of output per dollar

ekkarill92 answered 1 year ago

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