Please find attached Introduction to Management Accounting, 14th edition, Horngren. Chapter 9 problem 9-48

www.cob.sjsu.edu/buck_c/homework9.doc 9-48 (20-30 min.) This problem is similar to the problem in the chapter, with a slight difference. The purchase of BTL and the pooling of its operating statistics may be misleading because of fundamental differences in operations. The approach to the problem is to back out United's normal growth from the 20X1 figures. 1. United only 20X0 Customer lines Employees Lines per employee 14,615,000 72,350 202 20X1 15,054,000 74,520 202 Productivity in 20X1 remained at the same level as in 20X0. 2. United with BTL Customer lines Employees Lines per employee BTL Only 19,994,000 114,590 174 19,994,000 - 15,054,000 = 4,940,000 114,590 - 74,520 = 40,070 123 The low productivity of BTL reduces the productivity of the combined company. 3. The employees of the acquired company probably will not be able to immediately achieve the level of productivity achieved by United's other employees. A rapid change to increase their productivity could lead to labor unrest and political difficulties. A dramatic increase in productivity at BTL probably also will require considerable investment in improved technology and in education and training of employees. 1