In 2013, Choctaw Company implements a new process affecting labor and materials. The following reported data are provided to evaluate the effect on the company's productivity:
2012 2013
Number of units produced .......... 540,000 ................ 450,000
Labor hours used ..................... 108,000 ................. 75,000
Materials used (lbs.) ............... 2,160,000 ............. 1,500,000
Required:
1. Calculate the productivity profile for 2012.
2. Calculate the productivity profile for 2013, and comment on the effect of the new production and assembly process.
3. What if the labor hours used in 2013 were 112,500? What does comparison of the 2012 and 2013 profiles now communicate?