Use the data for Ashley Technology Inc. in Problem 16-41 to complete the following requirements:

Data from Problem 16-41

Ashley Technology Inc. manufactures a scrambling device for cellular telephones. The device’s main component is a delicate part, CT140. CT140 is easily damaged and requires careful handling. Once damaged, it must be discarded. The firm hires only skilled laborers to manufacture and install CT140; however, some are still damaged. Robotic instruments process all other parts. Ashley’s operating data for 2 years are as follows:

Required

In your calculations, use 4 significant digits after the decimal point.

1. Compute the partial financial productivity ratios for direct materials and direct labor for each of the 2 years.

2. On the basis of the partial financial productivity ratios you computed, what conclusions can you draw about the firm€™s productivity in 2019 relative to 2018?

3. Separate the changes in the partial financial productivity ratios from 2018 to 2019 into productivity changes, input price changes, and output changes.

4. Does the detailed information provided by separating the change of the partial financial productivity ratio offer any additional insight into the relative productivity for either 2018 or 2019?

Transcribed Image Text:

2019 2018 Units manufactured 750,000 900,000 1,000,000 1,050,000 200,000 $135 $62 Number of CT140 used Number of direct labor hours spent Cost of CT140 per unit Direct labor wage rate per hour 150,000 $156 $56