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You need to solve these using Excel. It would help me greatly if your discussion were typed (separate document or in the spreadsheet). You have decided to go into the auto detailing business, under the name Mr. Midnights Spit n Shine. Your expenses (labor and supplies), will run around $56 per car. You will also (on the advice of your accountant), allocate another $40 per car to cover your overhead. Finally, you have forecast 1,500 cars per year, at a price of $120 per car. Your breakdown of variable costs is as follows: 1. Item Consumable supplies (soap, wax, etc.) Labor Cost $32 $24 (2 hours@ $12) What is the multifactor productivity? a. b. You have now learned that the average auto detailing business has an average MFP of 1.50. What advice should someone give you? Charlotte Louise Title Services processes complex real estate titles, charging $300 per title. Charlotte employs 4 workers, each working 8 hours per day (at an average rate, including benefits of $20/hour). Overhead is estimated at $400 per day and the staff can complete 8 titles each 8 hour day. With a new cloud-based processing system, its estimated that 14 titles can be processed each day. Moreover, with the new system, Charlotte will be able to cut the work day from 8 hours to 7.5 hours. On the other hand, overhead will increase to $1,000 per day, and when the cost of training is factored in, payroll will go up to $22.50 per hour. 2. a. What is labor productivity (titles/hour) under the current and the proposed system? b. What is MFP under the current and the proposed system? c. What would you recommend and why? d. What other factors might you take into account?
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