Carlson Automotive Company manufactures fuel-injection systems. It manufactured and sold 60,000 units in 2018 and 64,000 units in 2019 at $25 per unit. In 2018, the firm used 75,000 pounds of alloy TPX–45 at $7.20 per pound and used 10,000 direct labor hours at an hourly wage rate of $30. In 2019, the firm used 89,600 pounds of alloy TPX-45 at $6.80 per pound and used 10,847 direct labor hours at an hourly wage rate of $32. The total amount of all other expenses remains the same at $450,000 each year. Jerry Olson, CEO, was disappointed that although the total sales increased in 2019, operating income declined from $210,000 in 2018 to $193,616 in 2019. Required Analyze the following: 1. Partial operational productivity of direct material and direct labor for both 2018 and 2019. 2. Partial financial productivity of direct material and direct labor for both 2018 and 2019. 3. Detailed partition of partial financial productivity. 4. Total productivity for 2018 and 2019 as measured in both units and sales dollars.
Carlson Automotive Company manufactures fuel-injection systems. It manufactured and sold 60,000 units in 2018 and 64,000 units in 2019 at $25 per unit. In 2018, the firm used 75,000 pounds of alloy TPX–45 at $7.20 per pound and used 10,000 direct labor hours at an hourly wage rate of $30. In 2019, the firm used 89,600 pounds of alloy TPX-45 at $6.80 per pound and used 10,847 direct labor hours at an hourly wage rate of $32. The total amount of all other expenses remains the same at $450,000 each year. Jerry Olson, CEO, was disappointed that although the total sales increased in 2019, operating income declined from $210,000 in 2018 to $193,616 in 2019. Required Analyze the following: 1. Partial operational productivity of direct material and direct labor for both 2018 and 2019. 2. Partial financial productivity of direct material and direct labor for both 2018 and 2019. 3. Detailed partition of partial financial productivity. 4. Total productivity for 2018 and 2019 as measured in both units and sales dollars.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 33E: A companys controller is adjusting next years budget to reflect the impact of an expected 3 percent...
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