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ZS Co uses throughput accounting. Revenue and cost details per unit for one of its products are as follows:
Selling price $180
Material costs $80
Conversion costs $50
Machine time is the bottleneck resource and the machine time for each unit is 12 minutes.
What is the return per bottleneck hour for the product?My calculation is (12/60*(180-80)) = 20
I have no answer in this question.Why are you attempting a question 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 answer is not 20.
The return per hour is (180 – 80) / (12/60) = $500.
MN manufacturers automatic industrial trolley known as TRLs. Each trolley stlells for 2000 and material cost per unit is $800. There is no limit to sales demand. Cost next you will be to $264000 for factory labours $834000 production overheads and $265000 for marketing and administrative cost.
Tha trolleys are made on two different machines. Machines and can produce the part for 40 each week but it is old and unreliable and it breaks down from time to time. It is estimated that on average 15% of production time on this machine is lost. Machine Z, that which is reasonably reliable can produce and assemble 30 trolleys per week.
The company has recently introduced just in time system and it is the company policy to hold little work in progress and not finished goods inventory from week to week. The company operates s 40 hours week 48 weeks a year
The throughput accounting ratio for the key resource for an average next year will be:
A. 1.078
B. 1.268
C. 1.338
D. 1.574
Sir in this question how will we do the adjustment of Idle time of machine X and after adjusting the Idle time how will we find units of machine X?I do not really like the wording of the question because it could be read that machine X can produce 40 per week despite the breakdowns, or it could be read that machine X could produce 40 per week if it did not break down but because it does break down can only make 40 x 85% = 34 per week.
However it does not matter because machine Z can only produce 30 per week and therefore machine Z is the bottleneck and the TPAR is calculated on machine Z.
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