Basics of Productivity MeasurementHolbrook Company gathered the following data for the past two years:Base YearCurrent YearOutput910,0001,110,000Output prices$15$15Input quantities:Materials (Ibs.)182,0001,110,000Labor (hrs.)91,000st5,000Input prices:Materials$4$5Labor$8$8Required:1. Prepare a productivity profile for each year. If required, round your answers to two decimal places.Holbrook CompanyProductivity ProfileBase YearCurrent YearMaterials productivity ratio5.Labor productivity ratio102. Prenare nartial income statements for each vear Labor prouucaviy rato2. Prepare partial income statements for each year.Holbrook CompanyPartial Income StatementsBase YearCurrent YearSales13,650,00016,650,000Materials728,0005,550,000Labor728,0004,440,000Gross profit12,194,0006,660,000Calculate the total change in income. If the change is negative, enter answer using a minus sign.-5,534,0003. Calculate the change in profits attributable to productivity changes. If the change is negative, enter answer using aminus sign. If required, round your intermediate calculations to the nearest dollar.4. Calculate the price-recovery component. If required, round your intermediate calculations to the nearest dollar.

Productivity profile involves analysis of the resources in order to produce the required output…

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Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 58BE

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Transcribed Image Text:Basics of Productivity Measurement Holbrook Company gathered the following data for the past two years: Base Year Current Year Output 910,000 1,110,000 Output prices $15 $15 Input quantities: Materials (Ibs.) 182,000 1,110,000 Labor (hrs.) 91,000 st5,000 Input prices: Materials $4 $5 Labor $8 $8 Required: 1. Prepare a productivity profile for each year. If required, round your answers to two decimal places. Holbrook Company Productivity Profile Base Year Current Year Materials productivity ratio 5. Labor productivity ratio 10 2. Prenare nartial income statements for each vear

Labor prouucaviy rato
2. Prepare partial income statements for each year.
Holbrook Company
Partial Income Statements
Base Year
Current Year
Sales
13,650,000
16,650,000
Materials
728,000
5,550,000
Labor
728,000
4,440,000
Gross profit
12,194,000
6,660,000
Calculate the total change in income. If the change is negative, enter answer using a minus sign.
-5,534,000
3. Calculate the change in profits attributable to productivity changes. If the change is negative, enter answer using a
minus sign. If required, round your intermediate calculations to the nearest dollar.
4. Calculate the price-recovery component. If required, round your intermediate calculations to the nearest dollar.

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