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Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher
Edition 3ISBN: 0073527114Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher
Edition 3ISBN: 0073527114Partial Productivity Measures
As the cost accounting manager at McKinley Industries (MI), you are responsible for compiling and reporting various performance measures to the senior managers. MI instituted many efficiency improvement programs recently and the CFO has asked you to measure and report partial productivity for both labor and materials. Data for the last two years follow:
| Year 2 | Year 1 |
Gallons input | 45,000 | 40,000 |
Labor hours | 50,000 | 38,000 |
Output (gallons) | 25,000 | 20,000 |
Required
a. Compute the partial productivity measures for labor for year 1 and year 2.
b. Compute the partial productivity measures for material for year 1 and year 2.
c. Comment on the results. Have the efficiency improvement programs resulted in greater productivity?
Verified
Step 1 of 3
The partial labor productivity measures are the measures which are not easily expressed as a ratio in output on single labor.
a.
The partial labor productivity measure for labor for the year 1 and 2 is computed by dividing the number of gallons output with the number of labor hours.
| Year 2 | Year 1 | |
| Gallons output (A) | 25,000 | 20,000 |
| Labor hours (B) | 50,000 | 38,000 |
| Partial labor productivity (A÷B) | 0.50 | 0.526 |
The partial labor productivity in the year 1 and year 2 is 0.526 and 0.50.
Step 2 of 3
Step 3 of 3
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