Question

Various financial data for the past two years follow.

LAST YEAR THIS YEAR Output: Sales $ 200,010 $ 201,050 Input: Labor 30,010 40,010 Raw materials 35,100 41,500 Energy 5,100 6,010 Capital 45,500 45,500 Other 2,100 3,010

Calculate the total productivity measure for this company for both years.

Answer 1

Answer:

Total Productivity:

* For last year: 1.70

* For this year: 1.48

Explanation:

We have the total productivity is equal to Sales/ Total resources spent.

So, the calculation for productivity as followed:

* For last year:

 + Sales = 200,010

 + Total resources spent = Labor + Raw materials + Energy + Capital + other = 30,010 + 35,100 + 5,100 + 45,500 + 2,100 = 117,810

=> Productivity = 200,010 / 117,810 = 1.70

* For this year:

 + Sales = 201,050

 + Total resources spent = Labor + Raw materials + Energy + Capital + other = 40,010 + 41,500 + 6,010 + 45,500 + 3,010 = 136,030

=> Productivity = 201,050/136,030 = 1.48.