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Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402 Exercise 31
Profit-Linked Productivity Measurement
Refer to Cornerstone Exercise 15.3. Choctaw Company provides the following additional information so that total productivity can be valued:
Required:
1. Calculate the cost of inputs in 2013, assuming no productivity change from 2012 to 2013.
2. Calculate the actual cost of inputs for 2013. What is the net value of the productivity changes? How much profit change is attributable to each input's productivity change?
3. What if a manager wants to know how much of the total profit change from 2012 to 2013 is attributable to price recovery? Calculate the price-recovery component, and comment on its meaning.
Refer to Cornerstone Exercise 15.3. Choctaw Company provides the following additional information so that total productivity can be valued:
Required:
1. Calculate the cost of inputs in 2013, assuming no productivity change from 2012 to 2013.
2. Calculate the actual cost of inputs for 2013. What is the net value of the productivity changes? How much profit change is attributable to each input's productivity change?
3. What if a manager wants to know how much of the total profit change from 2012 to 2013 is attributable to price recovery? Calculate the price-recovery component, and comment on its meaning.
Explanation
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1.Base period productivity ratio is 5 (l...
Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
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