A productivity index of 110% means that a company’s labor costs would have been 10% higher if it had not made production improvements.

A productivity index of 110% means that a company’s labor costs would have been 10% higher if it had not made production improvements. Assume that Digby had a productivity index of 112% and that Baldwin had a productivity index of 103%. Now refer to the Income Statements in the Annual Report for Digby and Baldwin. Using the labor costs shown in the Income Statements, how much more did Digby save in direct labor costs compared to Baldwin by having a higher productivity index?