Question

Sailmaster makes high-performance sails for competitive windsurfers. Below is information about the inputs and outputs for one model, the Windy 2000. (Please note that the second part of this question is different from other examples found online).

Units sold 1,217
Sales price each $1,700
Total labor hours 46,672
Wage rate $12/hour
Total materials $60,000
Total energy $4,000
Calculate:
I. the productivity in sales revenue/labor expense
(I think that I have done this part correctly; part II is what I don't understand)
(1217 x 1700) / (46672 x 12) =
2068900 / 560064 = 3.69
II. the total productivity.
I understand that total productivity could be expressed in units sold, or dollars of sales; please show both.

Answer 1

Answer and Explanation:

The computation is shown below:

a. The productivity in terms of sales revenue / labor expense:

Sales revenue = Units sold × sales price

= 1,217 × $1,700

= $2,068,900

Labor expense = Total labor hours × wage rate

= 4,6672 × $12

= $560,064

Now sales revenue to labor expense is

= $2,068,900 ÷ $560,064

= 3.69

2. Total productivity

As we know that

Total productivity =Output ÷ (labor + material + energy)

= ($2,068,900) ÷ ($560,064 + $60,000 + $4,000)

= $2,068,900 ÷ $624,064

= $3.315