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: Year 2 Year 1 Gallons input (thousands) 9,200 8,200 Labor-hours (thousands) 8,400 6,000 Gallons of output (thousands) 11,000 9,000 From the accounting records, you also gather the following information for the two years: Year 2 Year 1 Cost of inputs (per gallon) 79 $ 91 Wage rate (per hour) 24 $ 17 Total manufacturing overhead Selling price of output (per gallon) $1,310,000 $1,170,000 375 $ 380 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.) Year 2 Year! Total factor productivity

Answer 1

Anrues Productivity measure = Total output material thabortoheshead For Year-1 Total output = 9000 X 380 $ 3.42-0000 materials = 8200 x 91 $746,200 Labo = 6000 x 17 = $ 10 2000 $ 1170000 Overhead Productivity measure = $3,420,000 746200 + 10 2000 + 1170000 3420000 2018200 1.695 v For Year 2 Total output = 1600x375 materials 9200 x 79 Labz 84000 24 overhead 13 10 000 4125000 72680 20160o productivity measure 4125000 726800+201600+1310000 412S000 223840 1.843 ✓ Thank you