Frisen Communication Inc. manufactures a scrambling device for cellular telephones. The device's main component is a delicate

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Frisen Communication Inc. manufactures a scrambling device for cellular telephones. The device's main component is a delicate part, CSU10. CSU10 is easily damaged and requires careful handling. Once damaged, it must be discarded. The firm hires only skilled laborers to manufacture and install CSU10; however, some are still damaged. Robotic instruments process all other parts. Frisen's operating data for 2009 and 2010 follow:


20102009
Units manufactured500,000600,000
Units of SCU10 used800,000825,000
Direct labor hours used150,000200,000
Cost of CSU10 per unit $156$135
Direct labor wage rate per hour $56$63


Required
1. Compute the partial operational productivity for 2009 and 2010.
2. On the basis of the partial operational productivity that you computed, what conclusions can you draw about the firm’s productivity in 2010 relative to2009?

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Cost management a strategic approach

ISBN: 978-0073526942

5th edition

Authors: Edward J. Blocher, David E. Stout, Gary Cokins

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