University:
Acadia University
Course:
BUSI 2013 | Managerial Accounting
Academic year:

2024
Views:

176

Pages:

2
Author:

Abegail C.

PRODUCTIVITY MEASUREMENT **1. Current Productivity** Inputs: * Labor: x4 * Capital: x4 Outputs: x6 **2. Same Inputs, More Outputs** Inputs: * Labor: x4 * Capital: x4 Outputs: x8 **3. Lower Input, Same Output** Inputs: * Labor: x3 * Capital: x3 Outputs: x6 **4. Lower Input, More Output** Inputs: * Labor: x3 * Capital: x3 Outputs: x8 **5. Input Trade-off** Labor: x6 Capital: x3 **Is this really efficient?** **FORMULAS** **1. Partial Productivity Ratio = OUTPUT / INPUT** **2. Total Factor Productivity = OUTPUT / (Cost of Input based on Current Prices)** **3. Productivity Neutral Quantity (PQ)** **4. Growth Component = (PQ - Prior Year Quantity) x Prior Year Partial Productivity Ratio** **5. Price Recovery Component = (Current Year Price - Prior Year Price) x PQ Quantity** **6. Productivity Component = (Current Year Quantity - PQ) x Current Year Price** **Profit = Sales - Costs of Inputs** P1 Company A gathered the following data **Partial Productivity Ratio** | | Y1 | Y2 | |---|---|---| | Power | 96K/12K = 8 | 120K/12K = 10 | | Materials | 96K/24K = 4 | 120K/35K = 3.43 | **Total Factor Productivity** | | Y1 | Y2 | |---|---|---| | Output | 96,000 | 120,000 | | Cost of Input | (12K x 1) + (24K x 5) = 144,000 | (12K x 2) + (35K x 5) = 199,000 | | TFP (Total Factor Productivity) | 0.667 | 0.603 | **Strategic Profitability Analysis** | | Y1 | Y2 | Variance | Growth | Price Recovery | Productivity | |---|---|---|---|---|---|---| | Sales | 192,000 | 300,000 | 108,000 F | 48,000 F | 60,000 F | 0 F | | Cost of Inputs | | | | | | | | Power | 12,000 | 24,000 | 12,000 U | 3,000 U | 15,000 U | 6,000 F | | Materials | 96,000 | 175,000 | 79,000 U | 24,000 U | 30,000 U | 25,000 U | | Profit | 96,000 | 125,000 | 17,000 F | 21,000 F | 15,000 F | 19,000 U | | | Y1 | Y2 | Y1 | Y2 | Sales | Y1 | Y2 | PQ | Y1 | Y2 | PQ | Y1 | Y2 | PQ | Y1 | Y2 | | | IP | OP | IP | OP | | IP | OP | IP | OP | | IP | OP | IP | OP | | IP | OP | IP | OP | | Power | 12k | 15k | 30k | 24k | 96k | 120k | 150k | 175k | 192k | 240k | 300k | 300k | | | 3k | 15k | 6k | 24k | 30k | 25k | 60k | | | U | U | F | U | F | F | F | FAVOURABLE (F) = SALES - COST OF INPUTS - PROFIT UNFAVORABLE (U)