Munson Performance Auto, Inc., modifies 375 autos per year. The manager, Adam Munson, is interested in obtaining a measure of overall performance. He has asked you to provide him with a multifactor measure of last year's performance as a benchmark for future comparison. You have assembled the following data. Resource inputs were: labor, 10500 hours; 500 suspension and engine modification kits; and energy, 100000 kilowatt-hours. Average labor cost last year was $25 per hour, kits cost $1,000 each, and energy costs were $5 per kilowatt-hour. The overall performance at Munson Performance Auto, Inc. = autos/dollar of input (round your response to six decimal places).

The overall performance at Munson Performance Auto, Inc. will be 0.000297 auto per dollar of input if it modifies around 375 autos every year.

How to calculate overall performance?

For calculation of the overall performance, all the input costs need to be calculated by using the information given above as,

[tex]\rm Labor\ Cost = Cost\ per\ Hour\ x\ Total\ Hours\\\\\rm Labor\ Cost = 10500\ x\ 25\\\\\rm Labor\ Cost = \$262500[/tex]

Calculating further,

[tex]\rm Kits\ Cost= 500\ x\ 1000\\\\\rm Kits\ Cost= \$500000[/tex]

And,

[tex]\rm Energy\ Costs = 100000\ x\ 5\\\\\rm Energy\ Costs = \$500000[/tex]

So, the total costs of the Munson Performance Inc. will be $1,262,500. Now calculating the overall performance costs,

[tex]\rm Overall\ Performance = \dfrac{No.\ of\ Autos}{Overall\ Costs} \\\\\rm Overall\ Performance = \dfrac{375}{1262500}\\\\\rm Overall\ Performance = 0.000297[/tex]

Hence, the overall performance of the Munson Performance Auto, Inc. will be 0.00297 autos per every dollar spent if it modifies 375 autos every year.

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