Zychol Chemical Industry
ZYCHOL CHEMICAL CORPORATION:
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Bob Richard, the production manager of Zychol Chemicals, in Houston, Texas, is preparing his quarterly report, which is to include a productivity analysis for his department. One of the inputs is production data prepared by Sharoaton Walford, his operation analyst. The report which she gave him this morning showed the following;
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ZYCHOL CHEMICAL CORPORATION
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2006 2007
Production (Units) 4,500 6,000
Raw material used (barrel of petroleum by product) 700 900
Labor Hours 22,000 28,000
Capital Cost applied to the department ($) $375,000 $620,000
Bob knew that his labor cost per hour had increased from an average of $13 per hour to an average of $14 per hour, primarily due to move by management to become more competitive with a new company that had just opened a plant in the area. He also knew that his average cost per barrel of raw material has increased from $320 to $360. He was concerned about the accounting procedure that increased his capital cost from $375,000 to $620,000, but earlier discussion with his boss suggested that there was nothing that could be done about the allocation. Bob wondered if his productivity had increased at all. He called Sharon into the office and conveyed the above information to her and asked her to prepare this part of the report.
Solution of Part-1: mr. Richard probably in this part expect some analysis of productivity inputs for all factors, as well as a Multifactor Analysis for both year with change in the productivity(up↑ and down↓) and the amount noted. FORMULA FOR MULTIFACTOR PRODUCTIVITY: Productivity = Outputs All Inputs Output for the year 2006 = 4500 Output for the year 2007 = 7000 Input- 1 : Raw Material 2006 | 2007 | 700 × $320 | 900×
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Bob Richard, the production manager of Zychol Chemicals, in Houston, Texas, is preparing his quarterly report, which is to include a productivity analysis for his department. One of the inputs is production data prepared by Sharoaton Walford, his operation analyst. The report which she gave him this morning showed the following;
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ZYCHOL CHEMICAL CORPORATION
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2006 2007
Production (Units) 4,500 6,000
Raw material used (barrel of petroleum by product) 700 900
Labor Hours 22,000 28,000
Capital Cost applied to the department ($) $375,000 $620,000
Bob knew that his labor cost per hour had increased from an average of $13 per hour to an average of $14 per hour, primarily due to move by management to become more competitive with a new company that had just opened a plant in the area. He also knew that his average cost per barrel of raw material has increased from $320 to $360. He was concerned about the accounting procedure that increased his capital cost from $375,000 to $620,000, but earlier discussion with his boss suggested that there was nothing that could be done about the allocation. Bob wondered if his productivity had increased at all. He called Sharon into the office and conveyed the above information to her and asked her to prepare this part of the report.
Solution of Part-1: mr. Richard probably in this part expect some analysis of productivity inputs for all factors, as well as a Multifactor Analysis for both year with change in the productivity(up↑ and down↓) and the amount noted. FORMULA FOR MULTIFACTOR PRODUCTIVITY: Productivity = Outputs All Inputs Output for the year 2006 = 4500 Output for the year 2007 = 7000 Input- 1 : Raw Material 2006 | 2007 | 700 × $320 | 900×