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Grader Company manufactures road graders. Because its managers all have engineering backgrounds, it ...

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Grader Company manufactures road graders. Because its managers all have engineering backgrounds, it ...

Grader Company manufactures road graders. Because its managers all have engineering backgrounds, it prefers nonfinancial information for its decision-making models. Therefore, it requires that the accountants gather data to assist in the examination of nonfinancial results of operations. The following information relates to the manufacture of a mobile paver:

   Year 1   Year 2
Units produced and sold   3,400   2,800
Direct manufacture labour-hours   68,000   57,600
Direct materials used (tonnes)   14,500   12,200
Direct manufacture cost per hour   $21   $22
Direct materials cost per tonne   $431   $443

Required:
a.   What is the partial productivity for direct materials for each year?
b.   What is the partial productivity for direct manufacturing labour for each year?
c.   What is the total factor productivity for each year?

Textbook

Cost Accounting: A Managerial Emphasis, Canadian Edition

Edition: 7^th

Authors: Horngren, Datar, Rajan, Beaubien

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