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Wells and Severson are manufacturing companies. Comparative data for 20X1 and 20X7 are as follows:

Sales Revenue 20X1 $5,660,000,000 $7,658,000,000
20X7 $6,000,000,000 $9,667,000,000
Number of Employees 20X1 56,600 75,900
20X7 54,800 76,200

Assume the inflation has totaled 15% during these 6 years so that each 20X1 dollar is equivalent to 1.15 dollars in 20X7, due to inflation.

1. Compute 20X1 and 20X7 productivity measures in terms of revenue per employee for Wells and Severson.

2. Compare the change in productivity between 20X1 and 20X7 for Wells with that for Severson.

Solution Preview

Please refer to the attached Excel document about productivity measures.

1. I have also adjusted the 2007 number for ...

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