Using the Information Below, Determine the Productivity Measured as Output

question 53

Essay

Using the information below, determine the productivity measured as output per dollar input) for the each quarter and calculate the percentage change in productivity.
$\begin{array}{lrr}& \underline{\text {First Quarter}}& \underline{\text {Second Quarter}}\\\text { Total Units Sold } & 12,000 & 11,500 \\\text { Labor Hours } & 10,000 & 9,500 \\\text { Labor Cost/Hour } & \$ 8.00 & \$ 8.00 \\\text { Material Usage lbs.) } & 6,000 & 5,500 \\\text { Material Cost/lb. } & \$ 12.00 & \$ 11.50 \\\text { Other Costs } & \$ 25.000 & \$ 23.000\end{array}$

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Definitions:

Return On Investment

A gauge of an investment's profit, expressed as the return percentage in comparison to the cost of the investment.

Residual Income

Residual income is the profit remaining after deducting all required costs of capital from operating income.

Margin

Typically refers to the difference between the selling price of a product and its cost, used to measure profitability.

Turnover

The rate at which inventory or assets are sold and replaced or the rate at which employees are replaced in a business.