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Hi john sir..
Jhon sir..In 2013 december attempt there was a question number 2 on throughput accounting..solar panel…sir in that question why we donot consider include idle time in the calculation of hours while calculating tpar ratio..
Solution is given as follow:13 hours in a day * 5 days a week * 50 weeks a year * 90 percent utilization..
Whereas from my previous studies..i have learnt that we should use grosses time while calculating cost per lab hour or payment per hour..plz guide me
But we are not calculating the cost per labour hour.
The throughput is the selling price less the material cost.
To get the return per factory hour we divide by the machine hours needed per unit.The only relevance of the 90% is in calculating how many hours are available in order to get the cost per factory hour.
Got it..but john sir is it not possible that rather than machine hour..our labour hours are restricted…? Or our material is restricted? Then what would b the way to calculate ration in both cases?
No – throughput accounting is only relevant when machine hours are restricted.
If other factors are restricted then it stops being throughput accounting and becomes a standard key factor analysis question or (if there is more than one factor restricted) a linear programming question.
Because the whole point of throughput accounting is to make the best use of the machine time available under the assumption that all costs except for materials are fixed in the short-term.
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