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Question - In 2020 Tia Corp. implemented a program to reduce defects in the manufacturing process. The program focused on training production line employees at the beginning of the process to identify substandard direct materials that lead to defective units. Selected 2021 and 2020 results for Tia are as follows:
2021
2020
Units
62,500
67,188
Direct materials (pounds)
50,000
57,109
Direct labor (hours)
25,000
24,432
Cost of materials per pound
$12.00
$11.00
Cost of direct labor per hour
$30.00
$28.00
Required -
a. Calculate the partial operational productivity of Direct Materials and Direct Labor for 2021 and 2020 (round answers to four decimals).
b. Calculate the partial financial productivity of Direct Materials and Direct Labor for 2021 and 2020 (round answers to four decimals).
c. Was Tia's quality program effective? Support your answer with relevant insights (don't repeat calculation results) from your productivity analysis above.
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