- This topic has 3 replies, 2 voices, and was last updated 2 years ago by
.
- Posts
Hi John, can you please explain.
The following data refers to a soft drinks manufacturing company that passes its product through
four processes and is currently operating at optimal capacity.
Process Washing Filling Capping Labelling
Time per dozen units 6 mins 3 mins 1.5 mins 2 mins
Machine hours
available1,200 700 250 450
Product data $ per unit
Selling price 0.60
Direct material 0.18
Direct labour 0.02
Factory fixed cost $4,120Which process is the bottleneck?
A. Washing
B. Filling
C. Capping
D. LabellingWhy are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved Publishers – they have answers and explanations.
Washing is capable of processing 1,200 x 60 / 6 = 12,000 units.
Calculating for the others in the same way gives Filling as capable of processing 14,000 units, Capping as 10,000 units, and Labelling as 13,500 units.Capping is the smallest, is therefore limiting the production and is the bottleneck process.
- The topic ‘throughput accounting’ is closed to new replies.