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Can someone help explain limiting factor? I am having difficulty understanding

Forums › ACCA Forums › ACCA MA Management Accounting Forums › Can someone help explain limiting factor? I am having difficulty understanding

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • March 8, 2018 at 8:37 pm #441583
    Anonymous
    Inactive
    • Topics: 1
    • Replies: 0
    • ☆

    Costs and selling prices per unit are as follows:
    Product Rice Water Jello
    $/unit $/unit $/unit
    Selling price 92.00 110.00 120.00
    Material X ($12/kg) 6.00 12.00 24.00
    Material Y ($20/kg) 15.00 20.00 20.00
    Material Z ($18/kg) 22.50 27.00 27.00
    Labour ($30/hour) 12.00 13.50 18.00

    Fixed production overheads attributable to the manufacture of these products are $300,000 per month.

    DKL is preparing its production plans and has estimated the maximum demand from its customers in the next month to be 7,000 units for Rice, 11,000 units for Water and 8,500 units for Jello

    Each product passes through two departments – Assembly and Finishing. The number of each product that can be finished in one hour in each department is as follows:
    Product Number of Units per hour
    Assembly Finishing
    Rice 3 units 5 units
    Water 4 units 5 units
    Jello 3 units 5 units
    There are 5,000 hours available in each Department.

    March 9, 2018 at 8:20 am #441667
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54705
    • ☆☆☆☆☆

    Limiting factors are no longer examinable in Paper F2 and have not been examinable for many years.
    They are examined in Paper F5.

  • Author
    Posts
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  • The topic ‘Can someone help explain limiting factor? I am having difficulty understanding’ is closed to new replies.

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