At the end of 2011, Carianne Corporation implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase.Now, at the end of 2012, the president of the company wants an assessment of the changes on the company's productivity.The data needed for the assessment are as follows: What is the price-recovery component?

Question

At the end of 2011, Carianne Corporation implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase.Now, at the end of 2012, the president of the company wants an assessment of the changes on the company's productivity.The data needed for the assessment are as follows:  What is the price-recovery component?

Quizplus · Accepted Answer

The price-recovery component is calculated as (Total revenue - Total variable costs - Fixed costs - Profit) and in this case it is ($130,000 - $70,000 - $10,000 - $27,800) = $22,200. Therefore, the best choice is C.

At the End of 2011, Carianne Corporation Implemented a New