solution

ABC Contracting repaved 60 miles of two-lane road with a crew of 5 employees, the crew worked 5 days and used $10,000 worth of material. XYZ Contracting repaved 32 miles of four-lane road working 8 days with a crew of 4 employees using $4,000 worth of paving material. Both ABC Contracting and XYZ Contracting rented similar paving equipment costing $2,000 per day. (Answers may be very small because you are calculating miles per $.)

a. Calculate the multifactor productivity of each contractor if both pay their employees $15 per hour and each employee works 8 hours per day.

b. Which contractor is more productive?