ch15tc - COST MANAGEMENT Accounting & Control...

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COST MANAGEMENT 1 Hansen▪Mowen▪Guan Chapter 15 Productivity Measure and Control
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2 Study Objectives 1. Explain the meaning of productive efficiency, and describe the difference between technical and allocative efficiency. 2. Define partial productivity measurement, and list its advantages and disadvantages. 3. Explain what total productivity measurement is, and name its advantages. 4. Discuss the role of productivity measurement in assessing activity improvement.
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3 Productive Efficiency Productivity concerned with producing output efficiently specifically addresses the relationship of output and the inputs used to produce the outputs Total productive efficiency is the point at which two conditions are satisfied For any mix of inputs that will produce a given output, no more of any one input is used than necessary to produce the output. Given the mixes that satisfy the first condition, the least costly mix is chosen
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4 Productive Efficiency Technical Efficiency the condition where no more of any one input is used than necessary to produce a given output. Technical efficiency improvement occurs when less inputs are used to produce the same output or more output are produced using the same input.
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5 Productive Efficiency
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6 Productive Efficiency
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7 Productive Efficiency
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8 Productive Efficiency
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ch15tc - COST MANAGEMENT Accounting & Control...

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