The Big Black Bird Company has a large order for special plastic-lined military uniforms to be used in an urgent military operation. Working the normal two shifts of 40 hours each per week, the BBBC production process usually produced 2,500 uniforms per week at a standard cost of $120.00. Seventy employees work the first shift and 30 employees work the second. The contract price is $200.00 per uniform. Because of the urgent need, BBBC is authorized to use around the clock production, 6 days per week. When each of the two shifts works 72 hours per week, production increases to 4,000 uniforms per week but at a cost of $144.00 each.
a. Did the multifactor productivity ratio increase, decrease or remain the same? If it changed, by what percentage did it change?
b. Did the labor productivity ratio increase decrease or remain the same? If it changed, by what percentage did it change?
c. Did weekly profits increase decrease, or remain the same?