Question Set 2. For this question set, you will calculate labor productivity and multifactor productivity, both in tons of rock salt produced per dollar value of inputs.

The Delaware Salt Company employs 50 full-time line workers (each working 45 hours per week at a wage of $14/hr) and 6 managers, each earning a salary of $1,300/week. The company has capital expenses (plant, property, and equipment) of $18,000 per week and produces 200,000 tons of rock salt per week. The company recently installed new equipment that will increase weekly output by 9% and weekly capital expenses by 5.5%. You will need the following formulas:

Labor productivity = Weekly Output / Weekly Labor Cost

Multifactor productivity = Weekly Output / Weekly Labor Cost + Weekly Capital Expenses

After copying the table below into Excel, solve the following questions:

1. Calculate labor productivity including all employees (line workers & managers) for the old and new systems, in tons of output per dollar of input. (4pts)

2. Calculate labor productivity using just the line workers (do not include the managers) for the old and new systems, in tons of output per dollar of input. (4pts)

3. Calculate the multifactor productivity (including line workers, managers, and capital expenses) for the old and new systems, in tons of output per dollar of input. (4pts)

4. Calculate the percentage changes in labor and multifactor productivity. (3pts)

	Labor Productivity (including managers)	Labor Productivity (excluding managers)	Multifactor Productivity
Old System
New System
Percentage Change