In the fourth quarter of last year, Colditz Company embarked on a major effort to improve productivity. It redesigned products, reengineered manufacturing processes, and offered productivity improvement courses. The effort was completed in the last quarter of the current year. The controller's office has gathered the following year-end data to assess the results of this effort.

Required
1. Prepare a summary contribution approach income statement for each of the two years and calculated the change in operating income.
2. Compute the partial operational productivity ratios for each production factor in each year.
3. Compute the partial financial productivity ratios for each production factor in each year.
4. On the basis of the partial operational and financial productivity you computed, what conclusions can you make about the firm's productivity last year relative to the current year?
5. Separate the changes in the partial financial productivity ratio from the prior year to the current year into productivity changes, input price changes, and output changes.
6. Discuss additional insight on the relative productivity between the prior year and current year from the detailed information provided by separating the change in the financial partial productivity ratios.

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Current Year $40 20,000 14,000 5,250 $10 $25 2,000 $2 Prior year $40 16,000 13,000 6,000 $8 $20 1,000 $2 Selling price of the product Units manufactured Materials used (pounds) Labor hours Cost per pound of materials Cost per labor hour Power (kwh) Cost of power per kwh