Productivity Analysis Assignment
			Total = 55 points: Productivity Calculation Tab (30 points) + What-If Analysis Tab (25 points)
		Current Values			Use column F for
	Data:				question 8
	Metric	Parent (Domestic)	Subsidiary (LDC)		Parent (Domestic)
	Sales (units)	1,850,000	750,000		1,850,000
	Units Produced	1,425,000	479,586		1,425,000
	Labor (hours)	40,000	20,000		40,000
	Labor Cost ($) per hour	$14.56	$5.51		$14.56
	Materials Cost ($)	$400,259	$201,378		$400,259
	Equipment (Hours)	120,598	30,578		120,598
	Equipment Cost ($)	$1,359,600	$225,000		$1,359,600
	Fixed Costs ($)	$2,000,000	$725,000		$2,000,000
	Selling Price per Unit	$19.99	$19.99		$19.99
	What-If Productivity Values Based on New Data Entered in Column F
	Measure		Parent Organization
	Labor Productivity (units/labor hour)		35.63
	Labor Productivity (units/labor $)		2.45
	Materials Productivity (units/$)		3.56
	Equipment Productivity (units/hour)		11.82
	Equipment Productivity (units/$)		1.05
	Total-Factor Productivity (units/$)		0.33
Labor
7. Provide one possible explanation how the Parent can be more productive when considering labor productivity in units per hour, but the subsidiary is more productive in units per dollar.)
Labour Productivity in terms of units/labour $- It changed from 2.40 to 4.35. INCREASED. % Increase = ((4.35-2.4)/2.4) x 100 = (0.8125) = 81.25%
Parent Equipment Purchase (Part #1)
8. Assume the purchase of new equipment at an incremental, one-time fixed cost of $1,500,000 (added to the existing fixed cost) resulting in a reduction in labor hours to 30,000, a reduction in Equipment Hours to 100,000, and a reduction of Equipment Costs to $1,248,000. Also, labor costs per hour have increased by $4.00 per hour. All other costs remain the same. Change the appropriate values in column F above. Answer the questions below by comparing the new productivity value in cells D18 through D23 to the values you calculated on the "Productivity Calculations" worksheet. For example, if the value in D18 on this worksheet (Labor Productivity in units/labor hour) is less than the value for Labor Productivity in units/labor hour for the Parent operations on the "Productivity Calculations" worksheet, then choose "decreased"
Productivity Measure	Choose the correct answer for each productivity calculation
Labor Productivity in terms of units/labor hour
Labor Productivity in terms of units/labor $
Materials Productivity in terms of units/Materials Cost ($)
Equipment Productivity in terms of units/hour
Equipment Productivity in terms of units/$
Total Factor Productivity in terms of units/$
Parent Equipment Purchase (Part #2)
9. Calculate Total Revenue prior to any equipment changes using data in cells C6 through C14 above. The formula for Profit is Total Revenue - Total Costs The formula for Total Revenue is Total Units Sold * Selling Price per Unit
Pre Equipment Purchase Total Profit
Post Equipment Purchase Total Profit
10. Summarize your observations concerning how the potential new equipment purchase will impact each of the productivity values and total revenue. Provide a recommendation whether to purchase the equipment and also provide supporting evidence for your recommendation.