Name; Aira Cane G.

Evangelista

Course & Section: BSBA-1A

SEATWORK ON PRODUCTIVITY

1. At Modern Lumber, Inc., Art Binley, president and producer of apple crates sold to
growers, has been able to produce 240 crates per 100 logs with his current equipment.
He currently purchases 100 logs per day, and each log requires three labor-hours to
process. He believes that he can hire a professional buyer who can buy a better-quality
log at the same cost. If this is the case, he can increase his production to 260 crates per
100 logs. His labor-hours will increase by eight hours per day. What will be the impact
on productivity (measured in crates per labor-hour) if the buyer is hired?

Formula:
Single Factor Productivity= Units Produced/Input Used

Current Labor Productivity

=240 crates/100 logs (3)
=240/300
=0.8 crates per labor-hour

Labor Productivity with Buyer

=260 crates/100 logs (3) + 8hours
=260 crates/308
= 0.844 crates per labor hour

Formula:

(Current Productivity – Previous Productivity/ Previous Productivity) x 100

= (0.844 – 0.8) / (0.8) x 100

= 5.5% increase

 If the buyer is hired the productivity will increase 5.5%

2. Art Binley has decided to look at his productivity from a multifactor perspective. To do
so, he has determined his labor, capital, energy, and material usage and decided to use
dollar as the common denominator. His total labor – hours are now 300 per dayand will
increase to 308 per day. His capital and energy cost will remain constant at $350 and
$150 per day, respectively. Material cost for the 100 logs per day are $1,000 and will
remain the same. Because he pays an average pg $10 per hour, Binley determines his
productivity increase as follows:

CURRENT SYSTEM SYSTEM WITH PROFESSIONAL BUYER

Labor 300 hours Labor 308 hours
Material 100 logs/day Material 100logs/day
Capital 350 Capital 350
Energy 150 Energy 150
Total Cost Total Cost

Formula:
Multifactor Productivity= Output/Labor + Material+ Energy + Capital + Miscellaneous

Current System
Labor 300hrs X 10 3000
Material l00 logs/day 1000
Capital 350
Energy 150
TOTAL COST 4500

System with Professional Buyer

Labor 308hrs x 10 3080
Material 100 logs/day 1000
Capital 350
Energy 150
TOTAL COST 4580

Formula:
Single Factor Productivity =Unit Produced/ Input Used

= 240 crates/4500 dollars = 260 crates/4580 dollars

= 0.0533 crates/dollar = 0.0568 crates/dollars

Formula:
(CP-PP)/PP x 100

= 0.0568 – 0.0533 / 0.0533 x 100

= 6.6% increase

 Binleys productivity increase to 6.6%.