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Sunday, September 20, 2015

Eric Johnson (using data from Problem 1.6) determines his costs to be as follows

Problems 1.7 Eric Johnson (using data from Problem 1.6) determines his costs to be as follows:

• Labor: $10 per hour
• Resin: $5 per pound
• Capital expense: 1% per month of investment
• Energy: $.50 per BTU.

Show the percent change in productivity for one month last year versus one month this year, on a multifactor basis with dollars as the common denominator.

Data from Problem 1.6
Last Year Now
Units produced 1,000 1,000
Labor (hours) 300 275
Resin (pounds) 50 45
Capital invested ($) 10,000 11,000
Energy (BTU) 3,000 2,850


Click here for the solution: Eric Johnson (using data from Problem 1.6) determines his costs to be as follows