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 handling 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 2010 and 2011 relative to the insertion of DTV-12.Round calculations to two significant digits.
The partial direct labor financial productivity ratio for 2011 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 handling 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 2010 and 2011 relative to the insertion of DTV-12.Round calculations to two significant digits. 
The partial direct labor financial productivity ratio for 2011 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 2011 is calculated as follows:

Partial direct labor financial productivity ratio = (Sales for 2011 / Direct labor cost for DTV-12 insertion in 2011) / (Sales for 2010 / Direct labor cost for DTV-12 insertion in 2010)

Plugging in the values given in the table:

Partial direct labor financial productivity ratio = [(5,500,000 / 1,500,000) / (4,500,000 / 1,500,000)] = 3.66

Therefore, the correct choice is D, with a partial direct labor financial productivity ratio of 3.66.