5e sol15-09

5e sol15-09 - $7,560,000 Change in income = $2,460,000 3)...

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Cost Management Hansen and Mowen Ex 15-9 Name: SOLUTION Enter the appropriate numbers in the shaded cells in columns D, F, K, and M. 1) Productivity Input Output / Input ratio Base Year Materials 900,000 / 1,200,000 = 0.75 Labor 900,000 / 300,000 = 3.00 Productivity Input Output / Input ratio Current Year Materials 1,080,000 / 1,080,000 = 1.00 Labor 1,080,000 / 540,000 = 2.00 2) Base Year Current Year units price units price Sales 900,000 $15 $13,500,000 1,080,000 $15 $16,200,000 Less: Input costs Materials 1,200,000 x $5 6,000,000 720,000 x $6 4,320,000 Labor 300,000 x $8 2,400,000 540,000 x $8 4,320,000 Gross profit $5,100,000
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Unformatted text preview: $7,560,000 Change in income = $2,460,000 3) Current Base Input Output / Ratio = PQ Current Year Materials 720,000 / 0.75 = 960,000 Labor 720,000 / 3.00 = 240,000 Input PQ x P PQ x P AQ x P AQ x P Change Materials 1,440,000 x $6.00 = $8,640,000 1,080,000 x $6.00 = $6,480,000 $2,160,000 Labor 360,000 x $8.00 = 2,880,000 540,000 x $8.00 = 4,320,000 (1,440,000) $11,520,000 $10,800,000 $720,000 4) Price recovery component: Change in income $2,460,000 Change attributable to productivity 720,000 Price recovery component $1,740,000...
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