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WB manufactures automated industrial trolleys, knows as TLRs. Each
PLR sells for $2,500 and the material cost per unit is $800. There is no
limit to sales demand. Costs next year will be $264,000 for factory labour
$834,000 for production overheads, and $265,000 for marketing and
administrative costs. The trolleys are made on two different machines. Machine Z can
produce the parts for 40 TLRs each week but it is old and unreliable and
it break down from time to time. It is estimated that on average 15% of
production time on this machine is lost. Machine P, which is reasonably
reliable, can process and assemble 30 TLRs per week. The company
operates a 40- hour week , 48 weeks a year. The throughput accounting ratio for the key resource for an average hour
next year will be:
E. 1.078
F. 1.268
G. 2.230
H. 1.574Please do not simply type out a full question and expect to be provided with a full answer. You must have an answer in the same book in which found the question, so ask about whatever it is in the answer than you are not clear about and then I will explain 🙂
Throughput /Unit = 1700
problem is that Limiting factor / unit only consider 40/30 unit per weak = 1.333 units/hr
why only machine P units consider
Machine Z can produce parts for 85% x 40 = 34 units per week, but machine P can only assemble 30 units per week. Therefore it is machine P that is limited production and is the bottleneck resource.
Therefore the time per unit in the bottleneck is 40/30 = 1.333 hours.
So the throughput return per hour = (2,500 – 800) / 1.333 = $1,275.
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