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Help with throughput

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Help with throughput

  • This topic has 3 replies, 3 voices, and was last updated 8 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • June 9, 2015 at 11:55 pm #255845
    ajaved5
    Participant
    • Topics: 10
    • Replies: 18
    • ☆

    Hi. I have the following question below. I can understand everything apart from how they are working out the throughput per hour where is the 60/0.5 coming from?

    Corrie produces three products, X, Y and Z. The capacity of Corrie’s plant is restricted by process alpha. Process alpha is expected to be operational for eight hours per day and can produce 1,200 units of X per hour, 1,500 units of Y per hour, and 600 units of Z per hour.
    Selling prices and material costs for each product are as follows.

    Product. Selling price. Material. Throughput pu
    X. 150 70. 80
    Y. 120. 40. 80
    Z. 300. 100. 200

    Conversion costs are $720,000 per day.
    Required throughput ratio for each product

    Answer

    Product. Throughout per hour. Cost per hour
    X. 80 x (60/0.05 min). 96k
    Y. 80 x (60/0.04 min). 120k
    Z. 200 x (60/0.10 min). 120k

    Thanks in advance

    AJ

    June 10, 2015 at 7:43 am #255888
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54664
    • ☆☆☆☆☆

    Although the answer is correct, I don’t know why they have shown it in that way.

    For product X, is 1200 units are produced per hour, then the time for one unit is 1/1200 hours.

    So, the throughput per hour = 80 / (1/1200) = 80 x 1200 = 96,000

    The same logic applies to the other two products.

    August 15, 2016 at 5:12 pm #333370
    yaya
    Member
    • Topics: 3
    • Replies: 7
    • ☆

    hello sir if i may agree this logic can also work throughtput return by unit per hours can give you throughtput per hour

    August 15, 2016 at 5:19 pm #333375
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54664
    • ☆☆☆☆☆

    No – you really must watch my free lectures,

    There is no other reason for using a throughput approach other than by calculating the return per hour.

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