Answered: LAST YEAR THIS YEAR Production (dozen)…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

As part of a study for the Department of Labor Statistics, you are assigned the task of evaluating the improvement in productivity of small businesses. Data for one of the small businesses you are to evaluate are shown at right. The data are the monthly average of last year and the monthly average this year. Determine the multifactor productivity with dollars as the common denominator for:
a) Last year.
b) This year.
c) Then determine the percent change in productivity for the monthly average last year versus the monthly average this year on a multifactor basis.
◆ Labor: $8 per hour
◆ Capital: 0.83% per month of investment
◆ Energy: $0.60 per BTU

LAST YEAR
THIS YEAR
Production (dozen)
1,500
1,500
Labor (hours)
350
325
Capital investment ($)
15,000
18,000
Energy (BTU)
3,000
2,700

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