Question

As the cost accounting manager at Cambria Chemicals (CC), you are responsible for compiling and reporting various performance measures to the senior managers. The company instituted many efficiency improvement programs recently, and the CFO has asked you to measure and report partial productivity for both labor and materials. Data for the last two years follow.

  

	Year 2	Year 1
Gallons input (thousands)	9,100	8,100
Labor-hours (thousands)	9,300	6,900
Gallons of output (thousands)	10,900	8,900

Required:

a. Compute the partial productivity measures for labor for year 1 and year 2.

b. Compute the partial productivity measures for material for year 1 and year 2.

c-1. Have the efficiency improvement programs resulted in greater labor productivity? Yes or No

c-2. Have the efficiency improvement programs resulted in greater material productivity? Yes or No

Answer 1

1	Partial Labor Productivity = Total Output / Total Labor Hours
		Year 1	Year 2
	Total Output ( thousands )	8,900	10,900
	Total Labor Hours ( thousands )	6,900	9,300
	Partial Labor Productivity	1.290	1.172
2	Partial Material Productivity = Total Output / Total Input ( material )
		Year 1	Year 2
	Total Output ( thousands )	8,900	10,900
	Total Input ( thousands )	8,100	9,100
	Partial Labor Productivity	1.099	1.198
3	No
4	Yes
	Thank You!