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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 Columbus plant, reported the following results for the base period and its most recent year of operations: 20x1 Unit price (power) Unit price (materials) Unit selling price Output 216,000 Power (quantity used) 11,100 Materials (quantity used) 47,900 Suppose the following input prices are provided for each year: 20x1 $2 18 8 185,700 18,570 46,425 20x2 20x2 $3 17 10

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 Columbus plant, reported the following results for the base period and its most recent year of operations: 20x1 Unit price (power) Unit price (materials) Unit selling price Output 216,000 Power (quantity used) 11,100 Materials (quantity used) 47,900 Suppose the following input prices are provided for each year: 20x1 $2 18 8 185,700 18,570 46,425 20x2 20x2 $3 17 10

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 Output 185,700 Power (quantity used) 18,570 Materials (quantity used) 46,425 Suppose the following input prices are provided for each year: Unit price (power) Unit price (materials) Unit selling price Required: 20x2 216,000 11,100 47,900 20x1 $2 18 8 20x2 $3 17 10 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.
Transcribed Image Text: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 Output 185,700 Power (quantity used) 18,570 Materials (quantity used) 46,425 Suppose the following input prices are provided for each year: Unit price (power) Unit price (materials) Unit selling price Required: 20x2 216,000 11,100 47,900 20x1 $2 18 8 20x2 $3 17 10 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.
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