As the cost accounting manager at McKinley Industries (Ml), you are responsible

Question

As the cost accounting manager at McKinley Industries (Ml), you are responsible for compiling and reporting various performance measures to the senior managers. Ml instituted many efficiency improvement programs recently and the CFO has asked you to measure and report total factor productivity based on three inputs (material, labor, and overhead). From the accounting records, you also gather the following information for the two years: Compute the total factor productivity measures for year 1 and year 2 based on the three inputs (material, labor, and overhead). (Round your answers to 3 decimal places.)

Explanation / Answer

Year 2 Year 2 Input Details Input Qty/Hrs/$ Unit Rate   Input Amt $ Input Qty/Hrs/$ Unit Rate   Input Amt $ Cost of Inputs (in Gallons)             45,000                  85        3,825,000          40,000           90.00        3,600,000 Wages cost               50,000                  22        1,100,000          38,000           19.00           722,000 Manufacturing Overhead          3,200,000        2,900,000 Total Input Costs          8,125,000        7,222,000 Year 2 Year 2 Output Values   Output Qty Gallons Unit selling price Sales Value Output Qty Gallons Unit selling price Sales Value Sales revenue               27,000               360        9,720,000          22,000        370.00        8,140,000 Year 2 Year 1 Total Factor Productivity=Total Output Value/Total Input Costs=                  1.20              1.13

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