William owns a company who specializes in customized golf balls for promotional purposes. One employee working...

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William owns a company who specializes in customized golf balls for promotional purposes. One employee working 8 hours a day can produce 192 golf balls. Employees are paid $14.95 per hour. Plain golf balls are purchased for $0.50 each and design materials are averaged at $0.02 each. A specialized piece of equipment is used to customize the balls and it costs $20/day to operate this equipment. Golf balls sell for $2 each. a) Calculate the multifactor productivity (8 points) b) If the equipment is set to a faster speed, it will cost $22.50 per day to operate and production will be increased to 216 balls per day. Calculate the new multifactor productivity with this change. (10 points) c) By speeding up the equipment, the customization is not of as high a quality. Therefore, the price may have to be reduced. How low can the price go without reducing productivity below the original level? (17 points) William owns a company who specializes in customized golf balls for promotional purposes. One employee working 8 hours a day can produce 192 golf balls. Employees are paid $14.95 per hour. Plain golf balls are purchased for $0.50 each and design materials are averaged at $0.02 each. A specialized piece of equipment is used to customize the balls and it costs $20/day to operate this equipment. Golf balls sell for $2 each. a) Calculate the multifactor productivity (8 points) b) If the equipment is set to a faster speed, it will cost $22.50 per day to operate and production will be increased to 216 balls per day. Calculate the new multifactor productivity with this change. (10 points) c) By speeding up the equipment, the customization is not of as high a quality. Therefore, the price may have to be reduced. How low can the price go without reducing productivity below the original level? (17 points)

Answer rating: 100% (QA)

a Mult if actor productivity is defined as the ratio of output to inp... View the full answer