Question

Profile Productivity Measurement Objective

In 20x2, Choctaw Company implements a new process affecting labor and materials. The following reported data are provided to evaluate the effect on the company’s productivity:

	20x1	20x2
Number of units produced	510,000	360,000
Labor hours used	127,500	72,000
Materials used (lbs.)	1,457,143	900,000

Required:

1. Calculate the productivity profile for 20x1. If required, round your answers to two decimal places.

Partial Operational Productivity Ratios	20x1 Profile
Labor productivity ratio
Material productivity ratio

2. Calculate the productivity profile for 20x2. If required, round your answers to two decimal places.

Partial Operational Productivity Ratios	20x2 Profile
Labor productivity ratio
Material productivity ratio

3. What if the labor hours used in 20x2 were 109,500? What does comparison of the 20x1 and 20x2 profiles now communicate? If required, round your answers to two decimal places.

Partial Operational Productivity Ratios	20x1 Profile	20x2 Profile
Labor productivity ratio
Material productivity ratio

Answer 1

	Partial operational productivity ratios
			20x1 Profile
1	Labor productivity ratio	Units produced / Labor hours	510,000 / 127,500 = 4
	Material productivity ratio	Units produced / Material used	510,000 / 1,457,143 = 0.34
			20x2
2	Labor productivity ratio	Units produced / Labor hours	360,000 / 72,000 = 5
	Material productivity ratio	Units produced / Material used	360,000 / 900,000 = 0.4
			20x1	20x2
3	Labor productivity ratio	Units produced / Labor hours	510,000 / 127,500 = 4	360,000 / 109,500 = 3.28
	Material productivity ratio	Units produced / Material used	510,000 / 1,457,143 = 0.34	360,000 / 900,000 = 0.40
	Comparison of 20x1 and 20x2: Labor Productivity ratio: 20x1 = 4 units / hour 20x2 = 3.28 units / hour Labor Productivity ratio of 20x1 is more than 20x2 Material productivity ratio: 20x1 = 0.34 units / lbs 20x2 = 0.40 units / lbs Material productivity ratio of 20x2 is more than 20x1.