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A company sells three products: product x y and z.
The selling prices are 60 40 20
The direct material cost are 40 10 16
The machine hours are 10 20 2.5
Increasing the selling price of which product by 10% would improve the throughput accounting ratio assuming that the products are not mutually exclusive.What implication does the three products not being mutually exclusive have.
Also what does the statement the company cannot make enough of any of the products to satisfy external demand entirely as machine hours are restricted mean
Are you sure that you have copied the question correctly, because the same figures appear in a question in the BPP Revision Kit but the wording is different from what you have written.
Mutually exclusive means that they could only make one of the products, whereas not mutually exclusive means they could make all three (but the BPP question says that they are mutually exclusive, not that they are ‘not mutually exclusive’.)
The last statement in your post means that they cannot make as many units as they would be able to sell because there are not enough machine hours available. However it does not really make any sense unless the products are mutually exclusive.
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