Total factor productivity:
A)is a ratio of the value of output to the value of all key inputs.
B)is the same thing as the production volume variance.
C)focuses on an individual input.
D)includes materials and labor but not overheaD.Total factor productivity includes a number of inputs rather than just one.

Question

Quizplus · Accepted Answer

Total factor productivity measures the efficiency of all key inputs in producing output. It is calculated by dividing the value of output by the sum of the values of all key inputs, including labor, capital, and materials. Therefore, A is the correct choice.

Answer: B 
 The production volume variance is a measure of the difference between the actual output and the expected output. It is not the same thing as total factor productivity, which is a measure of the efficiency of all inputs. Therefore, B is incorrect.

Answer: C 
 Total factor productivity considers all key inputs that contribute to production, rather than just one individual input. Therefore, C is incorrect.

Answer: D 
 Total factor productivity includes all key inputs, including labor, capital, materials, and overhead. Therefore, D is incorrect.

Total Factor Productivity