Basics of Productivity Measurement

Holbrook Company gathered the following data for the past two years:

	Base Year	Current Year
Output	940,000	1,110,000
Output prices	$14	$14
Input quantities:
Materials (lbs.)	188,000	1,110,000
Labor (hrs.)	94,000	555,000
Input prices:
Materials	$5	$6
Labor	$8	$8

Required:

1. Prepare a productivity profile for each year. If required, round your answers to two decimal places.

Holbrook Company
Productivity Profile
	Base Year	Current Year
Materials productivity ratio
Labor productivity ratio

2. Prepare partial income statements for each year.

Holbrook Company
Partial Income Statements
	Base Year	Current Year
Sales	$	$
Materials
Labor
Gross profit	$	$

Calculate the total change in income. If the change is negative, enter answer using a minus sign. $_________ 3. Calculate the change in profits attributable to productivity changes. If the change is negative, enter answer using a minus sign. If required, round your intermediate calculations to the nearest dollar. $_________ 4. Calculate the price-recovery component. If required, round your intermediate calculations to the nearest dollar. $________