SOLUTION: 4. 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 $25 per hour per employee. Each

Question 1187470: 4. 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 $25 per hour per employee. Each employee identifies an average of 3,000 potential leads a week from a list of 5,000. An average of 4 percent actually sign up for the service, paying a one-time fee of $70. Material costs are $1,000 per week, and overhead costs are $9,000 per week. Calculate the multifactor productivity for this operation in fees generated per dollar of input.

Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
you are looking for the multi-productivity factor in fees generated per dollar of input.

your numerator will be dollars of revenue generated.

your denominator will be dollars of cost required.

your labor input will be 3 people * 25 dollars an hour each * 40 hours each = 3000 dollars per week.

your material costs are 1000 dollars per week.

your overhead costs are 9000 dollars per week.

your total input costs are 3000 + 1000 + 9000 = 13000 dollars per week.

each employee identifies an average of 3000 leads per week from a list of 5000.

an average of 4% of those leads actually signs up for the service, paying a one time fee of 70 per service.

each employee therefore generates .04 * 3000 * 70 = 8400 dollars in fees each week.
multiply that by 3 employees to get 3 * 8400 = 25200 dollars a week generated in fees.
that's your revenue.

your output is 25200 dollars of revenue.
your input is 13000 dollars of cost.

you productivity factor would be 25200 / 13000 = 1.938461538 per average week.

that translates to 1.938461538 dollars of revenue for every 1 dollar of cost.

here's a reference on multi-factor productivity you might find interesting.

https://smallbusiness.chron.com/multifactor-productivity-ratio-31922.html

RELATED QUESTIONS
You are calculating payroll. Your company has 45 employees who work 40 hours a week and... (answered by Theo)

A recent article in The Wall Street Journal entitled� As Identity Theft Moves Online,... (answered by Boreal)

A company assigns to each of its employees an id code that consists of one, two, or three (answered by ewatrrr)

You are the Vice President for Human Resources at XYZ Investment Management, Inc. Your... (answered by stanbon)

Thank your for your continued guidence and help in my pursuit of understanding... (answered by stanbon)

A telephone number consists of seven digits, the first three representing the ex-... (answered by ikleyn)

Any Help with this question is much appreciated! A recent article in The Wall Street... (answered by Theo)

A company finds that one out of three employees will be late to work on a given day. If... (answered by ewatrrr)

I completed this assignment but my answers were incorrect, I got another a chance to... (answered by rothauserc)