Profit-Linked Productivity Measurement

In 2015, Choctaw Company implements a new process affectinglabor and materials.

Choctaw Company provides the following information so that totalproductivity can be valued:

	2014	2015
Number of units produced	570,000	480,000
Labor hours used	114,000	120,000
Materials used (lbs.)	1,900,000	1,200,000
Unit selling price	25	27
Wages per labor hour	16	18
Cost per pound of material	3.70	3.80

Required:

1. Calculate the cost of inputs in 2015,assuming no productivity change from 2014 to 2015. If required,round your answers to the nearest dollar.

Cost of labor	$
Cost of materials
Total PQ cost	$

2. Calculate the actual cost of inputs for2015. If required, round your answers to the nearest dollar.

Cost of labor	$
Cost of materials
Total current cost	$

What is the net value of the productivity changes? If required,round your answers to the nearest dollar.
$

How much profit change is attributable to each input'sproductivity change? If an item is negative, use a minus (-) signto indicate.

Labor productivity change	$
Materials productivity change	$

3. What if a managerwants to know how much of the total profit change from 2014 to 2015is attributable to price recovery? Calculate the total profitchange.
$

Calculate the price-recovery component.
$