Brimson Forging Co.has provided the following information for last year: The total factor productivity measure is:
A)$480,000
B)$375,000
C)1.28
D)0.78

Question

Quizplus · Accepted Answer

The total factor productivity (TFP) measure is calculated by dividing the total value of output by the total cost of all inputs (labor, capital, materials, and energy). There is no dollar amount given for the total value of output or the total cost of inputs, so we cannot choose A or B. The TFP is a ratio, so it cannot be greater than 1, which rules out D. Therefore, the best choice is C, which is the only ratio provided.