1. XYZ Company produces various types of fans. In May, the company produced 1,728 window fans at a standard price of $40.00. The company has 12 direct labor employees whose compensation (including wages and fringe benefits) amounts to $21.00 per hour. During May, window fans were produced on 9 working days (of 8 hours each), and other products were produced on other days. Determine the labor productivity of the window fans.
2. XYZ Company (see # 1) also produces desk fans at a standard price of $25.00. During May, 1,872 desk fans were produced on 11 working days (of 8 hours each). On one day, two employees called in sick.
a. Determine the labor productivity of the desk fans.
b. Was productivity higher for the window fans or for the desk fans in May?
3. Here is additional information about XYZ Company (see #1 & #2). There were 20 working days in May. The direct material cost of window fans is $7.00; the direct material cost of desk fans is $5.00. The annual overhead expense incurred in operating the factory is $144,000.
a. Determine the multi-factor productivity of XYZ Company in May.
b. What is the interpretation of the multi-factor productivity?
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