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thank you…but if the values were for a quater it has to be divided by quarter right? 1000*13 weeks?
Sir, so the variable cost has to increase by new batch size of 1.25 (500/400)?
im sorry sir for not mentioning it clearly… its from the old kit, Q CTD,
CTD has two divisions – FD and TM. FD is an iron foundry division which produces
mouldings that have a limited external market and are also transferred to TM division. ( ive typed a small part for your reference)
my doubt is…
Sir, in the part b, ii) what I did was, I went back from having the RI as 85,000+ (CE×12%) 90,000 getting 175000 as the controllable profit, why can’t I get the transfer price as 175 000/15000?
Though the answer was 66+6.67=71.67sir, what i dont understand is, why is it 60/10 and not 10/60? plz sir! im stuck in a vey silly thing ..
sir, is my understanding correct…they tell, each units takes 10mins, therefore in an hour we can make 6 units, each unit is $4 so, its $24?
And also sir, why is the contribution* 60/10? i didnt only undersatnd thatsir, why is it 60/10? if we are converting mins into hours..it has to be 10/60 right? and also why are we multiplying the time in return per factory hour. thank you for your precious time sir>
sir, i found it from the forums and it seemed to be a question i feel stuck..pretty sure thats the whole question. thank you sir
i understand sir totally..just tell me sir, is there a specific reason that why they havent included the variable cost* plz sir!
sir, tell me why is this wrong,
return per factory hr= ((8-2)/.167( since its 10mins, converted to hours)
cost per factory hour= 216000/12000=18+0.067 ( 4mins labour time in hours)
tpar=1.99sir, plz correct my errors*
sir, if so in the question in pre dec mock 2023, theyve asked the TPAR for proceedure A,
selling price- 2700 vc-810.6
max demand for A was 600
surgeon hours was the bottleneck of .75hrs3. $70 of the variable cost for each procedure includes the costs of sterilizing and maintaining the medical equipment and theatre after each procedure. The remaining variable cost is direct materials.
4. There are five members of staff employed by Thin Co. Each works a total of 1,880 hours each per annum. The total salaries are 298,000. The only other hospital costs (comparable to ‘factory costs’ in a traditional manufacturing environment) are general overheads, including the theatre rental costs, amounting to $250,000 per annum.
5. Maximum annual demand for A and B is 600 and 1,200 procedures respectively. Time spent by each of the five different staff members on each procedure is as follows:
sir but in the answer theyve not included the variable cost of 70 right? why is it sir?
Correct 8.96
Step 1: find the direct material costs:
810.6 – 70 = 740.6
Step 2: Find throughput contribution per hour
(2,700 – 740.6) / 0.75 = 2612.53
Step 3: find other factory costs per hour
(298,000 + 250,000) / 1,880 = 291.49
Step 4: find the throughput accounting ratio:
2,162.53 / 291.49 = 8.96
Procedure A
hours per procedure
Procedure B
hours per procedure
Advisor
0.8
0.8
Nurse
1.0
1.0
Anesthetist
0.7
1.1
Surgeon
0.75
1.25
Recovery specialist
0.65
0.85
Part hours are shown as decimals e.g. 0·24 hours =14·4 minutes (0·24 x 60)
Surgeon’s hours has been correctly identified as the bottleneck.
thank you sir. Sir it was the pre dec mock 2023…So sir, other than material cost do we include all other cost uner factory cost in cost per factory hour?