The manager of a crew that installs wood floors has tracked the crew's output over the past several weeks. Each worker works 40 hours per week and earns $17 per hour. The wholesale cost of lumber to the company is $5 per square foot and the company charges its customers $15 per square foot of flooring installed.
Week Crew Size Lumber Used (sq. ft.) Flooring Installed (sq. ft.)
1 4 480 420
2 3 351 325
3 2 250 238
a. Calculate labor productivity for each of the weeks.
b. Suppose that in addition to labor cost and wholesale lumber cost, the firm's overhead is 120% of its labor cost. Calculate multifactor productivity for each of the weeks shown.
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