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Poco CO produced a single product A which passes through three different processes X,Y and Z. The output per hour of three processes is 25,30 and 32 units of A respectively. The organization operates ten hours in a day , 5 days a week and 50 weeks in a year. Product A can be sold $420 per unit and it has material cost $170 per unit. It is anticipated the conversion cost per annum will be $1800,000.
What is throughput accounting ratio per day?
Can u plz help me … i am unable to solve this
Why are you attempting questions for which you do not have an answer? You should be using a Revision Kit from one of the ACCA approved publishers – they have answers and explanations!
The throughput return is 420 – 170 = $250 per unit.
The bottleneck is the first process which can produce 25 units per hour. Therefore over a year they can produce 25 x 10 x 5 x 50 = 62,500 units per year.
So the cost per factory hour is 1800000/62500 = $28.80 per unit.Therefore the TPAR = 250/28.80
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