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Strike441
1 month ago
13

Refer to the HR Reports in the Inquirer. Through past investments in recruiting and training Chester has obtained a productivity

index of 109.4%. This means that Chester's labor costs would be increased by 9.4% if it did not have these productivity improvements. This is a competitive advantage that Chester can sustain or even widen further if its competitors have no HR initiatives. Now, refer to the Income Statement in Chester's Annual Report. How much did Chester's productivity improvements save it in direct labor costs (in thousands) last year?
a) $3,143
b) $3,065
c) $29,809
d) $821
Business
1 answer:
Katen [2.9K]1 month ago
3 0

Note:

I couldn't find the Chester Income Statement, but I was able to view a similar question regarding Digby.

The Complete Question is as follows:

Consult the HR Reports in the Inquirer. Digby has achieved a productivity index of 109.6% due to previous investments in hiring and training. Consequently, without these productivity enhancements, Digby's labor expenses would rise by 9.6%. This advantage can be maintained or even expanded if its rivals do not implement HR initiatives. Now, look at the Income Statement in Digby's Annual Report. How much did Digby's productivity enhancements save in direct labor costs (in thousands) the previous year?

A. $766

B. $29818

C. $3137

D. $3211

Answer:

Option D. $3,137

Explanation:

The 9.6% productivity index indicates that efficiency improvements would save 9.6% of the total direct costs if the strategy is followed. The total direct costs for all four products for the year amount to $32,680, which is found in the second last column.

The savings from last year can be calculated as follows:

Savings = $32,680 * 9.6% = $3,137

Thus, option C is accurate in this case.

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