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Hello Mr.John
Im referring to a question in current edition of BPP revision kit, Question Number (49 Scenario Corrie)
sir according to my calculation Return per factory hour is (X 1600) ,(Y 2000) ,(Z 2000)
return per factory hour = throughtput / time available per unit
but, according to the answer in the book they have multiplied the output per hour(units) by throughtput to find the return per factory hour, could you please justify it. thanks
For product X, the time per unit is 1/1200 hours (since they can produce 1200 units in 1 hour), which gives a return per hour of (150 – 70) /(1/1200) = $96,000
Alternatively, since they can produce 1200 units in 1 hour and each unit gives a return of $80, then the total return per hour is 1200 units x $80, which is again $96,000.
The same logic applies to the other two products.
(I don’t know how you got to $1600 for product X 🙂 )
How i arrived to that figure was, i assumed an hour as 60 mins, 60/1200 = 0.05
return per factoery hour = 80/0.05 = 1600
i was trying to figure our how much time would it take to produce a unit in minutes rather than in hours. 🙂
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