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CBF Throughput accounting

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › CBF Throughput accounting

  • This topic has 2 replies, 2 voices, and was last updated 1 year ago by SummerSky.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • June 24, 2024 at 6:30 pm #707593
    SummerSky
    Participant
    • Topics: 1
    • Replies: 1
    • ☆

    Hello,

    I have difficulty getting the working from the answer on one particular question in PM book from Kaplan. The question is as follows:

    After each manufacture, each heater has to go through 3 processes: Assembly, Quality Control and Packaging. The following information is available for the 3 heaters:

    Alpha Beta Gamma
    Sales price per unit $2.0 $2.25 $1.75
    Direct material cost per unit $0.50 $0.81 $0.35
    Direct labour cost per unit $0.30 $0.60 $0.50
    Machine time per unit:
    Assembly (in minutes) 2 3 2.5
    Quality Control (in minutes) 3 4 2
    Packaging (in minutes) 4 5 3
    Weekly sales demand (units) 1,000 1,500 850

    Operating expenses, including labour, are $4,500. The maximum hours available for the machines are 150 hours (Assembly), 170 hours (Quality Control) and 250 hours (Packaging).

    In first step i know i need to identify the bottleneck and to be able to do so i need to calculate the hours required for maximum production. Total demand would be 3,350 units (1,000 for Alpha + 1,500 for Beta + 850 for Gamma). The maximum machine hours available on Assembly are 150 hours (9,000 minutes). The time it takes to assemble all the units would be 7.5 minutes per unit (2 min. for Alpha + 3 min. for Beta + 2.5 min. for Gamma).

    The answer given for Assembly hours needed for maximum production states 143.75 hours and i cannot come to this figure, however, I try. Similarly answer given for Quality Control and Packaging for hours needed for maximum production are: 178.33 and 234.17 respectively.

    Would you be able to assist with the detail on how to approach the calculation for Assembly hours needed for maximum production?

    Many thanks

    June 24, 2024 at 11:14 pm #707594
    LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1513
    • ☆☆☆☆☆

    Calculate the total assembly time required for each product:
    Units * mins
    Alpha 1000u * 2 = 2000
    Beta 1500u * 3 = 4500
    Gamma 850 * 2.5 = 2125
    Total 8625 mins

    Assembly time from mins to hrs
    8625/60 mins per hour = 143.75
    So you can calculate the hours needed for Quality Control and Packaging by following the same steps for each process.

    June 25, 2024 at 11:03 am #707601
    SummerSky
    Participant
    • Topics: 1
    • Replies: 1
    • ☆

    Thank you so much.

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    Posts
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