The ABC company has a larger order for special military uniforms. Working in total 40 hours 50 employees work the first shift and 30 employees work in the second shift weekly. The company usually produces 2500 uniforms and cost of making charge per uniform is $ 120 (inputs including labor costs, materials costs etc) each. The cost of sales of uniforms $70000. Calculate Multifactor Productivity and labour productivity 

Let's calculate **Multifactor Productivity (MFP)** and **Labour Productivity** for ABC Company based on the given information.

### Definitions:
1. **Labour Productivity** measures output per unit of labor, commonly represented as the number of units produced per labor hour.
2. **Multifactor Productivity (MFP)** measures the ratio of total outputs to total inputs, including multiple input factors like labor, materials, etc.

### Step 1: Labour Productivity Calculation

Labour productivity is calculated as:

\[
\text{Labour Productivity} = \frac{\text{Total Output}}{\text{Total Labour Hours}}
\]

- **Total Output** = 2500 uniforms.
- **Total Labour Hours**:
    - First shift: 50 employees × 40 hours/week = 2000 labor hours
    - Second shift: 30 employees × 40 hours/week = 1200 labor hours
    - **Total Labor Hours** = 2000 + 1200 = 3200 labor hours.

Now, calculate the Labour Productivity:

\[
\text{Labour Productivity} = \frac{2500}{3200} \approx 0.78125 \, \text{uniforms per labor hour}
\]

### Step 2: Multifactor Productivity Calculation

Multifactor Productivity is calculated as:

\[
\text{MFP} = \frac{\text{Total Output (in sales value)}}{\text{Total Input Cost}}
\]

- **Total Output (in sales value)** = \$70,000
- **Total Input Cost**:
    - The cost to make 2500 uniforms at \$120 per uniform is:
    
    \[
    \text{Total Input Cost} = 2500 \times 120 = 300,000
    \]

Now, calculate the MFP:

\[
\text{MFP} = \frac{70,000}{300,000} \approx 0.2333
\]

### Final Answer:
- **Labour Productivity** ≈ 0.781 uniforms per labor hour.
- **Multifactor Productivity (MFP)** ≈ 0.233.

Would you like more details on the process or have any questions?

Here are 5 questions to further explore:
1. How does labor productivity vary with different shifts?
2. What factors influence the cost per uniform?
3. How can the company improve its multifactor productivity?
4. How would a change in the number of employees affect productivity?
5. What is the break-even point for the cost of sales?

**Tip:** Improving labor skills or optimizing shifts can significantly increase productivity in manufacturing operations.

The ABC company has a larger order for special military uniforms. Working in total 40 hours, 50 employees work the first shift and 30 employees work the second shift weekly. The company usually produces 2500 uniforms and the cost of making each uniform is $120 (inputs including labor costs, materials costs, etc.). The cost of sales of uniforms is $70,000. Calculate Multifactor Productivity and labor productivity.

Learn how to calculate multifactor productivity and labor productivity for ABC Company. This example demonstrates how to use the total output and input cost to determine both labor and multifactor productivity for the production of military uniforms. Suitable for business and economics students.

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