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: 20x2 Output 217,800 Power (quantity used) 10,900 Materials (quantity used) 47,200 Suppose the following input prices are provided for each year: 20x1 $2 20 10 Unit price (power) Unit price (materials) Unit selling price Required: 20x1 185,400 23,175 46,350 20x2 $3 19 12 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.
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: 20x2 Output 217,800 Power (quantity used) 10,900 Materials (quantity used) 47,200 Suppose the following input prices are provided for each year: 20x1 $2 20 10 Unit price (power) Unit price (materials) Unit selling price Required: 20x1 185,400 23,175 46,350 20x2 $3 19 12 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
20x2
Output
185,400
217,800
Power (quantity used)
23,175
10,900
Materials (quantity used)
46,350
47,200
Suppose the following input prices are provided for each year:
20x1
20x2
$2
$3
20
19
10
12
Unit price (power)
Unit price (materials)
Unit selling price
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.
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