Question

Use the information provided below to answer all questions that follow.

Thabs Performance Auto, Inc. specialises in the modification of cars. Mr Thabiso Mokwena, the managing director of Thabs Performance Auto wants to measure the performance of the business and has asked you to determine the multifactor productivity of the operations. You have assembled the following data:

	Last year	This year
Number of cars modified	700	750
Labour	10 000 hours at R300 per hour	9 000 hours at R350 per hour
Suspension and engine modification kits	500 at R20 000 each	520 at R22 000 each
Energy	100 000 kilowatt-hours at R20 per kilowatt-hour	80 000 kilowatt-hours at R25 per kilowatt-hour

2.1 If the multifactor productivity of Thabs Performance Auto's operations last year was 1.4, calculate how much was charged, on average, for each car modification. (5 marks)

2.2 Assuming the average price per modification has not changed, calculate the multifactor productivity of Thabs Performance Auto's operations this year (round off answer to 2 decimal places). (4 marks)

2.3 Determine the percentage change in the multifactor productivity of Thabs Performance Auto's operations this year compared to last year (round off answer to 2 decimal places). (3 marks)