Reference no: EM132591158

Power Company has been unhappy with the financial accounting variances that its cost accounting system has been producing, because its managers believe that there is more to evaluating an operation than just examining accounting numbers. Therefore, it has started gathering data to assist in the examination of nonfinancial results of operations. The following information relates to the manufacture of remote control units for televisions, radios, and stereo components:

                                                                                2016                     2017

Remote control units produced and sold           80,000                100,000
Direct manufacture labor-hours                      12,000                13,200
Direct materials used (sets)                            80,600                 100,500
Direct manufacture cost per hour                      $18                       $20
Direct materials cost per set?                              $31                $32

Required:

Question 1: What is the partial productivity of direct materials for each year?

Question 2: What is the partial productivity of direct manufacturing labor for each year?

Question 3: Did each area improve between 2016 and 2017 Explain.

Question 4: What will be the projected direct material and labor needs for 2013 if remote control units increase by 12,000 units, assuming Power Company applies the constant returns to scale technology?