Charles Lackey operates a bakery in Idaho Falls, Idaho. Because of its excellent product and excellent location, demand has increased by 25 % in the last year. On far too many occasions, customers have not been able to purchase the bread of their choice. Because of the size of the store, no new ovens can be added. At a staff meeting, one employee suggested ways to load the ovens differently so that more loaves of bread can be baked at one time. This new process will require that the ovens be loaded by hand, requiring additional manpower. This is the only thing to be changed. The bakery currently makes 1,800 loaves per month. The pay will be $8 per hour for employees and each employee works 650 hours per month and a per loaf ingredient cost of $0.50.

current multifactor productivity for 640 work hours per month = _____ loaves/ dollar (round to three decimal places)

Employee cost for 640 work hours per month =

Utility cost per month =

Ingredient cost per month =

Thus, total cost = Employee cost + Utility cost + Ingredient cost =

Current production per month =

Therefore, Multifactor productivity = ( rounded to 3 decimal places )

Employee cost Revised scenario

Utility cost per month =

Ingredient cost per month =

Thus, total cost = Employee cost + Utility cost + Ingredient cost =

Current production per month =

Therefore, Multifactor productivity = Total number of loaves per month

Thank you for your help