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Productivity Analysis Mel Stern is currently working a total of 10hours per day to produce 300 ceramic vases. He thinks that bychanging the paint used for the vases that he can increase his rateto 400 vases per day. Total material cost for each vase isapproximately $3.50; he has to invest $20 in the necessary supplies(expendables) per day; energy costs are assumed to be only $4.00per day; and he thinks he should be making $15 per hour for histime.

a. Viewing this from a total (multifactor) productivityperspective, what is his productivity at present and with the newpaint?

b. What is the change in productivity if he uses the newpaint?

c. How would total (multifactor) productivity change ifusing the new paint raised Mr. Stern's material costs by$1.00 per vase? (You would need both the current and the newproductivity indexes)

d. If he uses the new paint, by what amountcould Mr. Stern's material costs increase without reducingtotal (multifactor) productivity

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9993329

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