As the cost accounting manager at Cambria Chemicals (CC), you are responsible fo
ID: 2585271 • Letter: A
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:
From the accounting records, you also gather the following information for the two years:
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 1 Gallons input (thousands) 10,900 9,900 Labor-hours (thousands) 9,100 6,700 Gallons of output (thousands) 12,700 10,700Explanation / Answer
Total productivity = Value of output ÷ Value of inputs (materials, labor, and overhead).
Year 1
Total output ($390 × 10,700) = $ 4173000
value Materials value ($94 × 9900) = $ 930600
Labor value ($19 × 6700) = 127300
Overhead value (given) = 1170000 $ 2227900
Total factor productivity ($4173000 ÷ $2227900) = 1.873
Year 2
Total output value ($385 × 12700) = $ 4889500
Materials value ($77 × 10900) = $ 839300
Labor value ($24 × 9100) = 218400
Overhead value (given) = 1360000 $ 2417700
Total factor productivity ($4889500 ÷ $2417700) = 2.022
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