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

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.

Quizplus · Accepted Answer

Total factor productivity (TFP) is calculated by dividing the total output (revenue) by the total input (labor plus capital). From the given information, we can calculate TFP as: TFP = (sales - cost of materials) / (labor cost + depreciation + cost of capital). TFP = (3,600,000 - 1,600,000) / (1,400,000 + 200,000 + 800,000) = 2,000,000 / 2,400,000 = 1.28. Therefore, the answer is C.