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The following information is available for a single product:
Units produced 500
Time taken 200 hours
Maximum time available 200 hours
Materials purchased 1,000 kg costing $3,000
Materials used 800 kg
Labour costs $2,000
Overheads $1,500
Sales $9,000.What is the throughput accounting ratio for this product?
1. The answer is 1.70
2. Material purchased rather than material used has been used to calculate throughput.
– Could you explain why?
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