Partial Operational and Financial Productivity In the fourth quarter of last year, Colditz...

Partial Operational and Financial Productivity In the fourth quarter of last year, Colditz Company embarked on a major effort to improve productivity. It redesigned products, reengineered manufacturing processes, and offered productivity improvement courses. The effort was completed in the last quarter of the current year. The controller’s office has gathered the following year-end data to assess the results of this effort.

Required In your calculations, use 6 significant digits after the decimal point.

1. Prepare a summary contribution approach income statement for each of the two years and calculate the change in operating income.

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2. Compute the partial operational productivity ratios for each production factor in each year.

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3. Compute the partial financial productivity ratios for each production factor in each year.

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4. On the basis of the partial operational and financial productivity ratios computed in (2) and (3), what conclusions can you make about the firm’s productivity last year relative to the current year?

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5. Separate the changes in the partial financial productivity ratio from the prior year to the current year into productivity changes, input price changes, and output changes.

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6. Consider the changes calculated in requirement 5. Does this detailed information offer any additional insight into the relative productivity of Colditz for the prior year and the current year?