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Question - In 2019 Kyoto Corp. implemented a program to improve product quality. The quality program focused on training the managers responsible for the purchase of raw materials. The quality program also included training for direct labor assembly employees to improve skills in the manufacturing process. Selected 2020 and 2019 results for Kyoto are as follows:
2020
2019
Units
136,000
124,000
Direct materials (pounds)
60,000
54,000
Direct labor (hours)
20,000
18,000
Cost of materials per pound
$4.00
$3.80
Cost of direct labor per hour
$30.00
$28.00
Required -
a. Calculate the partial operational productivity of Direct Materials and Direct Labor for 2020 and 2019 (round answers to four decimals).
b. Calculate the partial financial productivity of Direct Materials and Direct Labor for 2020 and 2019 (round answers to four decimals).
c. Was Kyoto's quality program effective? Support your answer with relevant insights (don't repeat calculation results) from your productivity analysis above.
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