The diagnostic department at Saints Memorial Hospital provides medical tests and evaluations for patients, ranging from analyzing blood samples to performing magnetic resonance imaging (MRI). Average cost to patients is $60 per patient. Labor costs average $15 per patient, materials costs are $20 per patient, and over head costs are averaged at $20 per patient.
a. What is the multifactor productivity ratio for the diagnostic department? What does this ending mean?
b. If the average lab worker spends three hours for each patient, what is the labor productivity ratio?