Posted: April 30th, 2016
a. Prepare a multiple-year trend report for overall costs of quality
b. Prepare a multiple-year trend report for each category of quality costs
5. At the end of 2009, Wilson Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2010, 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:
Output 20,000 24,000
Output prices $20 $20
Materials (lbs.) 16,000 16,800
Materials unit price $6 $8
Labor (hrs.) 10,000 9,600
Labor rate per hour $10 $10
Power (kwh) 4,000 6,000
Price per kwh $2 $3
a. Compute the partial operational measures for each input for both 2009 and 2010. What can be said about productivity improvement?
b. Prepare an income statement for each year and calculate the total change in profits.
c. Calculate the profit-linked productivity measure for 2010. What can be said about the productivity program?
d. Calculate the price-recovery component. What does this tell you?
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