As the cost accounting manager at Cambria Chemicals (CC), you are responsible fo
ID: 2524724 • Letter: A
Question
As the cost accounting manager at Cambria Chemicals (CC), you are responsible for compiling and reporting various performance measures to the senior managers. The company instituted many efficiency improvement programs recently, and the CFO has asked you to measure and report total factor productivity measures based on the three inputs (material, labor, and overhead). Data for the last two years follow:
From the accounting records, you also gather the following information for the two years:
Required:
a. 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.)
Total Factor Productivity Year 2 Year 1
Year 2 Year 1 Gallons input (thousands) 9,300 8,300 Labor-hours (thousands) 8,900 6,500 Gallons of output (thousands) 11,100 9,100Explanation / Answer
Explanation:Total productivity = Value of output ÷ Value of inputs (materials, labor, and overhead).
Year1:
Total output=375*9100=3412500
Value Materials=82*8300=680600
Value Labour=16*6500=104000
Overhead Value=1180000
Total Value of Input costs=680600+104000+1180000=1352600
Total Factory Productivity=3412500/1352600=2.523
Year 2:
Total output=370*11100=4107000
Value Materials=85*9300=790500
Value Labour=23*8900=204700
Overhead Value=1280000
Total Value of Input costs=790500+204700+1280000=2275200
Total Factory Productivity=4107000/2275200=1.805
Year 1 Year 2 Total output value 3412500 4107000 Materials value 680600 790500 Labor value 104000 204700 Overhead value 1180000 1280000 Total value of input costs 1352600 2275200 Total factor productivity 2.523 1.805Related Questions
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