Gutsen Communications Inc. manufactures a scrambling device for cellular phones. The main component of the scrambling device is a very delicate part—DTV-12. DTV-12 requires careful handlings during manufacturing. Once damaged, the part must be discarded. Only skilled laborers are hired to manufacture and install DTV-12. Damages still occur, however. The following are the operating data of Gutsen Communications Inc. for 2018 and 2019 relative to the insertion of DTV-12. Round calculations to 2 significant digits.$\begin{array}{lrr}
& {2018} &{2019} \
\text { Number of phones manufactured } & 600,000 & 780,000 \
\text { Units of DTV-12 used } & 960,000 & 1,072,500 \
\text { Direct labor hours for DTV-12 insertion } & 1,800 & 2,600 \
\text { Total cost of DTV-12 units } & \$ 1,443,750 & \$ 2,333,750\
\text { Direct labor wage rate per hour }&\$67&\$82
\end{array}$The partial direct labor financial productivity ratio for 2019 is:
A) 0.33.
B) 0.42.
C) 2.35.
D) 3.66.
E) 4.98.

Question

Gutsen Communications Inc. manufactures a scrambling device for cellular phones. The main component of the scrambling device is a very delicate part—DTV-12. DTV-12 requires careful handlings during manufacturing. Once damaged, the part must be discarded. Only skilled laborers are hired to manufacture and install DTV-12. Damages still occur, however. The following are the operating data of Gutsen Communications Inc. for 2018 and 2019 relative to the insertion of DTV-12. Round calculations to 2 significant digits.$\begin{array}{lrr} 
& {2018} &{2019} \
\text { Number of phones manufactured } & 600,000 & 780,000 \
\text { Units of DTV-12 used } & 960,000 & 1,072,500 \
\text { Direct labor hours for DTV-12 insertion } & 1,800 & 2,600 \
\text { Total cost of DTV-12 units } & \$ 1,443,750 & \$ 2,333,750\
\text { Direct labor wage rate per hour }&\$67&\$82
\end{array}$The partial direct labor financial productivity ratio for 2019 is:
A) 0.33.
B) 0.42.
C) 2.35.
D) 3.66.
E) 4.98.

Quizplus · Accepted Answer

The partial direct labor financial productivity ratio for 2019 is calculated by dividing the total output (in terms of sales or production value) by the total direct labor costs. However, since the output value is not provided, we'll focus on the productivity aspect related to the cost of DTV-12 units and direct labor hours.For 2019:- Total cost of DTV-12 units = $2,333,750- Direct labor hours for DTV-12 insertion = 2,600 hours- Direct labor wage rate per hour = $82First, calculate the total direct labor cost:Total direct labor cost = Direct labor hours * Direct labor wage rate per hour= 2,600 hours * $82/hour = $213,200Then, calculate the partial direct labor financial productivity ratio:= Total cost of DTV-12 units / Total direct labor cost= $2,333,750 / $213,200 ≈ 10.95However, this calculation does not match any of the provided options, indicating a misunderstanding in the approach based on the given options. The correct approach to calculate the partial direct labor financial productivity ratio should involve comparing the value added by labor to the cost of labor, but with the given data and options, there seems to be a discrepancy.Given the misunderstanding in the initial explanation and the calculation based on the provided data and options, the correct approach should focus on the productivity aspect directly related to labor input and output in financial terms, which typically involves output value over labor cost. Without clear output value, we aim for a ratio that reflects labor efficiency or productivity in financial terms, but the provided data and options do not align with standard calculations for such a ratio.Re-evaluating the approach based on the options given and the standard formula for productivity ratios (output over input), and acknowledging the error in the initial explanation due to the mismatch with provided options, the correct answer should reflect a standard calculation based on the given data points. However, without direct output values or a standard formula application that matches the options, there's a critical misunderstanding in the initial explanation. Given the nature of the question and the provided data, the correct answer should be derived from a clear formula or method that directly applies to the given options, focusing on labor productivity in financial terms. The initial explanation failed to accurately apply such a method or formula, leading to confusion and an incorrect conclusion.

Gutsen Communications Inc The Partial Direct Labor Financial Productivity Ratio for 2019 Is