A US manufacturing company operating a subsidiary in an LDC (Less Developed Country) shows the following results:
US LDC
Sales (units) 100,000 20,000
Labor (hrs.) 20,000 15,000
Raw Mat'l (currency) $20,000 FC 20,000
Capital equipment (hrs) 60,000 5,000
(A) Compute the multifactor productivity figures for labor and capital together. Are the results better?
(B) Calculate raw material productivity figures (units/$, where $1 = FC 10). Explain why these figures might be greater in the subsidiary.