Question

Interperiod Measurement of Productivity, Profit-Linked Measurement

Helena Company needs to increase its profits and so has embarked on a program to increase its overall productivity. After one year of operation, Kent Olson, manager of the Columbus plant, reported the following results for the base period and its most recent year of operations:

	20x1	20x2
Output	185,100	217,200
Power (quantity used)	18,510	11,200
Materials (quantity used)	46,275	47,800

Suppose the following input prices are provided for each year:

	20x1	20x2
Unit price (power)	$ 2	$ 3
Unit price (materials)	18	17
Unit selling price	8	10

Required:

1. Compute the profit-linked productivity measure. By how much did profits increase due to productivity? If required, round your intermediate calculations and final answers to the nearest dollar amount.
$

2. Calculate the price-recovery component for 20x2. If required, round your intermediate calculations and final answers to the nearest dollar amount.
$

Answer 1

Answer PRgenlo 0 PaPt-inkedPducivity measure standard standard as 85100 pe 20x powor 01981 Standand as 30mal ias 85100 pen 4625 4 Pa CPouson) op and and onit price X 2200 3 to 65160 PaLHalenials 923100 0tal P Lo 65160 23100 988260

Aca NO Actaal Pa (ouse ttaoo x3 33600 Actial Pa (materials) 44800x 812600 Tobal Pa Cont 33600 t 812600 *846200 Pinbed produchivity Total aclaal Pa Cort measune otal Pa co 988260 846200 142060 ncreas in profit 14a060 intreaein profit measwie= Vhe necbbect the AawOrable grocers change is because in Creas

TagesNo rice ecoveu component for aoxa Revenue oP ieling pite 85100 x 8 11 1480800 Tooxa, Revenue 10 X 21200 08081 691200 Differen ce 2000 Confiaputs -(1200 x 3)4800 2013, Cofn pu 33600 82600 846200 in doxt, coo nul-18510 x2)+ (4654 310a0 8 32950 869970 Diffenence - 4 23770 6 3 00 - 869970

14970 91200 310 Profib 1490 Patnkd produbi hice componert changes ccovey vily meartwie 14a060 T14970 52910 Price component 542910 aecovey