Problem:

The following table shows data on the average number of customers processed by several bank service units each day. The hourly wage rate is $30, overhead rate is 1.0 times labor cost, and material cost is $7 per customer.

Units              Employees             Customers Processed

  A                       3                             28

  B                       6                             44

  C                       7                             62

  D                       2                             22

Required

Question 1) Compute the labor productivity and the multifactor productivity for each unit. Use an 8 hour day for multifactor productivity. And if a new procedure is introduced that allows employees to process one additional customer per day, compute the expected labor and multifactor productivity rates for each unit.

Question 2) Suppose a new, more standardized procedure is to be introduced that will enable each employee to process one additional customer per day. Compute the expected labor and multifactor productivity rates for each unit. Solve the given numerical problem and illustrate step by step calculation.