Question
In the fourth quarter of last year, Colditz Company embarked on a major effort to improve productivity. It redesigned products, reengineered manufacturing processes, and offered
In the fourth quarter of last year, Colditz Company embarked on a major effort to improve productivity. It redesigned products, reengineered manufacturing processes, and offered productivity improvement courses. The effort was completed in the last quarter of the current year. The controllers office has gathered the following year-end data to assess the results of this effort:
Required
1. Prepare a summary contribution income statement for each of the 2 years, and calculate the change in operating income.
2. Compute the partial operational productivity ratios for each production factor in each year.
3. Compute the partial financial productivity ratios for each production factor in each year.
Units manufactured and sold Selling price of the product Direct materials used (pounds) Cost per pound of materials Direct labor hours Hourly wage rate Power (kwh) Cost of power per kwh Current Year 27,000 $ 47 14, 700 $ 15 5,950 $ 30 1,500 $ 3 Prior Year 22,500 $ 47 13, 700 $ 12 6, 700 $ 25 750 $ 3
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started