A U.S. manufacturing company operating a subsidiary in an LDC (less-developed country) shows the following results:

U.S. LDC Sales (units) 100,000 20,000 Labor (hours) 20,000 15,000 Raw materials (currency) $20,000 FC 20,000 Capital equipment (hours) 60,000 5,000

a. Calculate partial labor and capital productivity i gures for the parent and subsidiary.

Do the results seem confusing?

b. Compute the multifactor productivity i gures for labor and capital together. Do the results make more sense?

c. Calculate raw material productivity i gures (units/$ where $1 5 FC 10). Explain why these i gures might be greater in the subsidiary. LO.1