Munson Performance Auto, Inc., modifies 375 autos per year. The manager, Adam Munson, is interested in obtaining a measure of overall performance. He has asked you to provide him with a multifactor measure of last year’s performance as a benchmark for future comparison. You have assembled the following data. Resource inputs were labor, 10,000 hours; 500 suspension and engine modification kits; and energy, 100,000 kilowatt-hours. Average labor cost last year was $20 per hour, kits cost $1,000 each, and energy costs were $3 per kilowatt-hour. What do you tell Mr. Munson?

Respuesta :

Answer:

The last year's performance taking into account that was mofied 375 autos and considering inputs as Labor, Kits and Energy was $2,667 per auto.

Explanation:

1. To define a multifactor measure is necessary start by calculate the cost of different resources that was assembled, as follows:

1. Labor resource= 10,000 h

Labor cost per hour= $[tex]\frac{20}{h}[/tex]

Labor input = [tex]10,000h*\frac{20}{h}[/tex]=$200,000

2. Suspension and engine modification kits = 500

Cost of each Kit= $1,000

Kit's Input= [tex]500 kits*\frac{1000}{kit}[/tex] = $500,000

3. Energy resource= 100,000 kilowatt-hours = 100,000 kW-h

Cost of each kilowatt-hour= $[tex]\frac{3}{kW-h}[/tex]

Energy Input=  [tex]100,000kW-h*\frac{3}{kW-h}[/tex]= $300,000

2. Now, for an overall performance you should sum differents Inputs;

Total Input=Labor Input + Kit's Input + Energy Input

Total Input= $200,000 + $500,000 + $300,000

Total Input = $1,000,000

3. Define how much money of the inputs ($1,000,000) corresponds to each of 375 autos:

Input per Auto = $[tex]\frac{1,000,000}{375}=[/tex]=$2,667

4. Answer:

The last year's performance taking into account that was mofied 375 autos and considering inputs as Labor, Kits and Energy was $2,667 per auto.