Broha Company manufactured 1,500 units of its only product during 2019. The inputs for this production are as follows:
450 pounds of Material A at a cost of $1.50 per pound
300 pounds of Material H at a cost of $2.75 per pound
300 direct labor hours at $20 per hour

The firm manufactured 1,800 units of the same product in 2018 with the following inputs:
500 pounds of Material A at a cost of $1.20 per pound
360 pounds of Material H at a cost of $2.50 per pound
400 direct labor hours at $18 per hour

Round all calculations to 2 significant digits.

In 2018, the partial financial productivity of direct labor is:
A) 0.22.
B) 0.25.
C) 4.00.
D) 4.50.
E) 5.00.

Question

Broha Company manufactured 1,500 units of its only product during 2019. The inputs for this production are as follows:
450 pounds of Material A at a cost of $1.50 per pound
300 pounds of Material H at a cost of $2.75 per pound
300 direct labor hours at $20 per hour

The firm manufactured 1,800 units of the same product in 2018 with the following inputs:
500 pounds of Material A at a cost of $1.20 per pound
360 pounds of Material H at a cost of $2.50 per pound
400 direct labor hours at $18 per hour

Round all calculations to 2 significant digits.

In 2018, the partial financial productivity of direct labor is:
A) 0.22.
B) 0.25.
C) 4.00.
D) 4.50.
E) 5.00.

Quizplus · Accepted Answer

Partial financial productivity of direct labor is calculated by dividing the total output by the cost of direct labor. 
In 2018,
Total output = 1,800 units 
Direct labor cost = 400 hours x $18 = $7,200 
Therefore, Partial financial productivity of direct labor = 1,800/$7,200 = 0.25.

Broha Company Manufactured 1,500 Units of Its Only Product During