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1. Based on the following data, calculate the single-factor productivity ratio using hours of labor for a housekeeping department.
Number of employees = 100
Average hourly rate = $5.50
Total hours worked in September = 15,570
Total square feet maintained = 190,000
Assume that a new piece of equipment could allow 25% of the labor force in question 1 to be eliminated. Using a 173-hour working month for each employee, a total equipment cost of $60,000 (which has a useful life of 3 years), and ignoring the cash flow and time value of money impact, would this be a good use of capital?
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