A company offers ID theft protection using leads obtained from client banks. Three employees work 40 hours a week on the leads, at a pay rate of $16 per hour per employee. Each employee identifies an average of 3,800 potential leads a week from a list of 4,600. An average of 10 percent of potential leads actually sign up for the service, paying a one-time fee of $70. Material costs are $1,400 per week, and overhead costs are $9,000 per week. Calculate the multifactor productivity for this operation in fees generated per dollar of input. (Round your answer to 2 decimal places.) Multifactor productivity

Question

Business

Callum

29 June, 14:30

A company offers ID theft protection using leads obtained from client banks. Three employees work 40 hours a week on the leads, at a pay rate of $16 per hour per employee. Each employee identifies an average of 3,800 potential leads a week from a list of 4,600. An average of 10 percent of potential leads actually sign up for the service, paying a one-time fee of $70. Material costs are $1,400 per week, and overhead costs are $9,000 per week. Calculate the multifactor productivity for this operation in fees generated per dollar of input. (Round your answer to 2 decimal places.) Multifactor productivity

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Answers (1)

Know the Answer?

Katrina · Answer 1

The correct answer is 6.48.

Explanation:

According to the scenario, the given data are as follows:

Total number of employees = 3

Pay rate = $16 per hour per employee

One time fees = $70

Average identifies customer = 3,800

Conversion rate = 10%

So, we can calculate the multifactor productivity by using following formula:

Multifactor productivity = Total earning : Total expense

Where, Total earning = 3,800 * 3 * $70 * 0.10 = $79,800

and Total Expense = 3 * 40 * 16 + $1,400 + $9,000 = $12,320

By putting the value we get,

Multifactor productivity = $79,800 : $12,320

= 6.48

Hence, the multifactor productivity for this operation is 6.48.