Reference no: EM132854991

Question - Profit-Linked Productivity Measurement - In 20x2, Choctaw Company implements a new process affecting labor and materials.

Choctaw Company provides the following information so that total productivity can be valued:

	20x1	20x2
Number of units produced	510,000	420,000
Labor hours used	170,000	210,000
Materials used (lbs.)	2,550,000	1,400,000
Unit selling price	$23	$25
Wages per labor hour	$12	$14
Cost per pound of material	$3.40	$3.50

Required -

1. Calculate the cost of inputs in 20x2, assuming no productivity change from 20x1 to 20x2. If required, round your answers to the nearest dollar.

2. Calculate the actual cost of inputs for 20x2. If required, round your answers to the nearest dollar.

3. What if a manager wants to know how much of the total profit change from 20x1 to 20x2 is attributable to price recovery? Calculate the total profit change.