At the end of 2014, Diatomic Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2015, 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:
A) $319,950
B) $270,000
C) $90,000
D) $49,950

Question

At the end of 2014, Diatomic Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2015, 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: 
A) $319,950 
B) $270,000 
C) $90,000 
D) $49,950

Quizplus · Accepted Answer

To calculate the productivity change, we need to use the following formula:

Productivity = Output / Input

Using the data given in the table, we can calculate the productivity for 2014 and 2015:

Productivity for 2014 = 10,500 / 350 = 30
Productivity for 2015 = 13,125 / 375 = 35

To calculate the productivity change, we can use the following formula:

Productivity Change = (Productivity for 2015 - Productivity for 2014) / Productivity for 2014

Productivity Change = (35 - 30) / 30 = 0.1667 or 16.67%

Now, we can calculate the dollar value of the productivity change by multiplying the change in productivity by the total revenue for 2014:

Dollar Value of Productivity Change = Productivity Change * Total Revenue for 2014

Dollar Value of Productivity Change = 0.1667 * $300,000 = $49,950

Therefore, the best choice is D, as it represents the dollar value of the productivity change between 2014 and 2015.

At the End of 2014, Diatomic Company Implemented a New