manufacturing company operating a subsidiary in an LDC (less-developed country) shows the following results:

18. A U.S. manufacturing company operating a subsidiary in an LDC (less-developed

country) shows the following results:

U.S. LDC

Sales (units) 100,000 20,000

Labor (hours) 20,000 15,000

Raw materials (currency) $20,000 FC 20,000

Capital equipment (hours) 60,000 5,000

a. Calculate partial labor and capital productivity fi gures for the parent and subsidiary.

Do the results seem confusing?

b. Compute the multifactor productivity fi gures for labor and capital together. Do the

results make more sense?

c. Calculate raw material productivity fi gures (units/$ where $1 5 FC 10). Explain why

these fi gures might be greater in the subsidiary.