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.

The total productivity ratio in 2018 is:
A) 0.15.
B) 0.21.
C) 0.70.
D) 1.43.
E) 4.83.

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.

The total productivity ratio in 2018 is:
A) 0.15.
B) 0.21.
C) 0.70.
D) 1.43.
E) 4.83.

Quizplus · Accepted Answer

To calculate the total productivity ratio, we need to use the formula:
Total productivity ratio = (output in current year / input in current year) / (output in previous year / input in previous year)

Output in 2019 = 1,500 units
Output in 2018 = 1,800 units
Input in 2019 = (450 * $1.50) + (300 * $2.75) + (300 * $20) = $7,650
Input in 2018 = (500 * $1.20) + (360 * $2.50) + (400 * $18) = $9,700

Total productivity ratio = (1,500 / $7,650) / (1,800 / $9,700)
Total productivity ratio = 0.210

Therefore, the best choice is B, as it matches the calculated value of the total productivity ratio.

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