=+15-37 KK Partial productivity measurement (Appendix 15-1) Gams Ltd manufactures wallets from fabric. In 2014, Gams Ltd
Question:
=+15-37 KK Partial productivity measurement (Appendix 15-1)
Gams Ltd manufactures wallets from fabric. In 2014, Gams Ltd made 2520000 wallets using 2000000 metres of fabric. In 2014, Gams Ltd has capacity to make 3307500 wallets and incurs a cost of $9922500 for this capacity. In 2015, Gams plans to make 2646000 wallets, make fabric use more efficient and reduce capacity.
Suppose that in 2015 Gams makes 2646000 wallets, uses 1764000 metres of fabric and reduces capacity to 2700000 wallets, incurring a cost of $8370000 for this capacity.
Required 1 Calculate the partial-productivity ratios for materials and conversion (capacity costs) for 2015, and compare them to a benchmark for 2014 with calculations based on 2015 output.
Step by Step Answer:
Cost Accounting A Managerial Emphasis
ISBN: 9781442563377
2nd Edition
Authors: Monte Wynder, Madhav V. Rajan, Srikant M. Datar, Charles T. Horngren, William Maguire, Rebecca Tan