Response to the following problem:
Cunningham Performance Auto, Inc. modifies 375 autos per year. The manager, Peter Cunningham, 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 hrs., 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 $3.00 per Kilowatt-hour. What do you tell Mr. Cunningham?