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QUESTION

# (a) Franklin Robinson is currently working atotal of 10 hours per day to produce 340 shirts.

(a)    Franklin Robinson is currently working atotal of 10 hours per day to produce 340 shirts. He personally thinks that bychanging the dye used for shirts that he can increase his rate to 460 shirtsper day. The total material cost for each shirt is costing approximately \$4.50. He has to invest \$30.00 in the necessary supplies (expendables) per dayand energy costs are assumed to be only \$ 5.00 per day. Further, John thinksthat he should be making \$11.00 per hour for his time.

(i)     Viewing this from a total (multifactor)productivity perspective, what is his productivity at present and with the newdye?

(6 marks)

(ii)  How would total (multifactor) productivity change ifusing the new dye raised Erik’s material costs by \$0.70 per shirt?

(4 marks)

(iii)  Ifhe uses the new dye, by what amount could Erik’s material costs increasewithout reducing total (multifactor) productivity?