Garbino Company manufactures wallets from fabric. In $2019,$ Garbino made $2,610,000$ wallets using $1,500,000$ yards of fabric. In $2019,$ Garbino has capacity to make $3,300,000$ wallets and incurs a

cost of $$11,550,000$ for this capacity. In $2020,$ Garbino plans to make $2,871,000$ wallets, make fabric use more efficient, and reduce capacity. Suppose that in $2020$ Garbino makes $2,871,000$ wallets,

uses $1,740,000$ yards of fabric, and reduces capacity to $2,900,000$ wallets at a cost of $$8,990,000.$ Assume the fabric costs $$4\mathrm{.}50$ per yard in $2020$ and $$4\mathrm{.}60$ per yard in $2019.$

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To assist you, use the popup to identify the various components of the formula.

$($Click to view the components you will use in your formulas.$)$

Determine the formula for the total factor productivity $($TFP$)$ for $2020$then calculate the ratio. $($Round the ratio to four decimal places.$)$

Requirement $2.$ Compare TFP for $2020$ with a benchmark TFP for $2019$ inputs based on $2020$ prices and output.

To assist you, use the popup to identify the various components of the formula.

$($Click to view the components you will use in your formulas.$)$

Begin by determining the formula used to calculate the benchmark TFP for $2019$ inputs based on $2020$ output, then complete the calculation. $($Round the ratio to four decimal places.$)$

$=$

Benchmark TFP

$=$

$=,$ units $of$ output per dollar $of$ input

$($Round the percentage to the nearest tenth percent, X$.$X$\%.)$

The total factor productivity

by

$\%$ from $2019$ to $2020.$

Requirement $3.$ What additional information does TFP provide that partial productivity measures do not?

A major advantage of TFP over partial productivity measures is that TFP

inputs. Partial productivities

be combined to indicate the overall effect on cost as a result of these individual improvements. Conversion costs in each year depend on production capacity defined in terms of kits that can be$$ processed, not the actual kits started. Selling and$$ customer$-$service costs depend on the number of customers that VaporXcan$$ support, not the actual number of customers it serves. VaporXhas $76$ customers in $2019$ and $83$ customers in $2020.$ Calculate the amount and cost of$($a$)$ unused manufacturing capacity and$($b$)$ unused selling and$$ customer$-$service capacity at the beginning of $20202020$ based on actual production and actual number of customers served in $20202020.$

$2.$

Suppose VaporXVaporX can add or reduce its selling and$$ customer$-$service capacity in increments of $1010$ customers. What is the maximum amount of costs that VaporXVaporX could save in $20202020$ by downsizing selling and$$ customer$-$service capacity?

$3.$

VaporXVaporX$,$ in$$ fact, does not eliminate any of its unused selling and$$ customer$-$service capacity. Why might VaporXVaporX not$$ downsize?