A firm has obtained a productivity index of 115.5% meaning labor costs would be increased by 15.5% if it did not have these productivity improvements. This is a competitive advantage that it can sustain or even widen further if its competitors have no HR initiatives. Refer to the income statement below. How much did this firm's productivity improvements save it in direct labor costs last year (remember that the income statement shows numbers in 000s)?

A firm has obtained a productivity index of 115.5% meaning labor costs would be increased by 15.5% if it did not have these productivity improvements. This is a competitive advantage that it can sustain or even widen further if its competitors have no HR initiatives. Refer to the income statement below. How much did this firm's productivity improvements save it in direct labor costs last year (remember that the income statement shows numbers in 000s)?

Annual Report Dec. 1942878 Baldwin C59559 2018 Income, Statement Bat Beetle $35,506 $33,713 (Product Name:) Bold Buddy $16,545 Busy 2018 Income Statement 2018 Total $119,585 Common Size 100.0% Sales $33,821 Variable Costs: Direct Labor Direct Material Inventory Carry Total Variable $10,436 $14,559 $236 $25,231 $3,363 $6,094 $384 $9,841 $8,271 $14,554 $609 $23,435 $7,002 $13,685 $551 $21,238 $29,072 $48,892 $1,780 $79,744 24.3% 40.9% 1.5% 66.7% Contribution Margin $8,590 $6,704 $12,072 $12,475 $39,841 33.3% Period Costs: Depreciation SG&A: R&D Promotions Sales Admin Total Period $1,292 $876 $1,100 $400 $265 $3,933 $1,213 $963 $1,100 $400 $129 $3,805 $1,473 $988 $1,100 $1,200 $278 $5,039 $1.647 $939 $1,100 $1,200 $264 $5,150 $0 $0 $5,625 $3,765 $4,400 $3,200 $936 $17,926 4.7% 3.1% 3.7% 2.7% 0.8% 15.0% Net Margin $4,658 $2,899 $7,033 $7,325 $21,914 18.3% Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost to carry unsold goods in inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions. The promotion budget for each product. Sales: The sales force budget for each product. Other: Charges not included in other categories such as Fees, Write Offs, and TQM. The fees include money paid to investment bankers and brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last year's current debt, including short term debt, long term notes that have become due, and emergency loans. Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Other EBIT Short Term Interest Long Term Interest Taxes Profit Sharing Net Profit $311 $21,603 $1,806 $2,439 $6,075 $226 $11,057 0.3% 18.1% 1.5% 2.0% 5.1% 0.2% 9.2% Variable Margins 2008 Baldwin 40.0% 1 Annual Report Dec. 1942878 Baldwin C59559 2018 Income, Statement Bat Beetle $35,506 $33,713 (Product Name:) Bold Buddy $16,545 Busy 2018 Income Statement 2018 Total $119,585 Common Size 100.0% Sales $33,821 Variable Costs: Direct Labor Direct Material Inventory Carry Total Variable $10,436 $14,559 $236 $25,231 $3,363 $6,094 $384 $9,841 $8,271 $14,554 $609 $23,435 $7,002 $13,685 $551 $21,238 $29,072 $48,892 $1,780 $79,744 24.3% 40.9% 1.5% 66.7% Contribution Margin $8,590 $6,704 $12,072 $12,475 $39,841 33.3% Period Costs: Depreciation SG&A: R&D Promotions Sales Admin Total Period $1,292 $876 $1,100 $400 $265 $3,933 $1,213 $963 $1,100 $400 $129 $3,805 $1,473 $988 $1,100 $1,200 $278 $5,039 $1.647 $939 $1,100 $1,200 $264 $5,150 $0 $0 $5,625 $3,765 $4,400 $3,200 $936 $17,926 4.7% 3.1% 3.7% 2.7% 0.8% 15.0% Net Margin $4,658 $2,899 $7,033 $7,325 $21,914 18.3% Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost to carry unsold goods in inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions. The promotion budget for each product. Sales: The sales force budget for each product. Other: Charges not included in other categories such as Fees, Write Offs, and TQM. The fees include money paid to investment bankers and brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last year's current debt, including short term debt, long term notes that have become due, and emergency loans. Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Other EBIT Short Term Interest Long Term Interest Taxes Profit Sharing Net Profit $311 $21,603 $1,806 $2,439 $6,075 $226 $11,057 0.3% 18.1% 1.5% 2.0% 5.1% 0.2% 9.2% Variable Margins 2008 Baldwin 40.0% 1