FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Interperiod Measurement of Productivity, Profit-Linked Measurement
Print Item
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:
Output
Power (quantity used)
Materials (quantity used)
20x1
20x2
185,700
217,800
18,570
11,100
37,140
47,100
Suppose the following input prices are provided for each year:
Unit price (power)
Unit price (materials)
20x1
20x2
$4
16
$5
15
6
8
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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Transcribed Image Text:HW Interperiod Measurement of Productivity, Profit-Linked Measurement Print Item 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: Output Power (quantity used) Materials (quantity used) 20x1 20x2 185,700 217,800 18,570 11,100 37,140 47,100 Suppose the following input prices are provided for each year: Unit price (power) Unit price (materials) 20x1 20x2 $4 16 $5 15 6 8 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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