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plz help in this question
Hi Sky Ltd., produces three products, A, Band Cí. The capacity of Hi Skyís plant is restricted and all products pass through a single process. This process is expected to be operational for 7 hours per day and can produce 1,600 units of A per hour, 1,800 units of B per hour, and 800 units of C per hour. Conversion costs are Rs. 600, 000 per day. Selling prices and material costs for each product are as follows:
selling price material cost throughput contribution per unit
A 160 80 80
B 280 50 90
C 140 110 170
Required:
(i) Calculate the profit per day if daily output achieved is 4,000 units of A, 3,500 units of B and 1,000 units of c
Determine the efficiency of the bottleneck process given the output in (i) above.
(iii) Calculate the Throughput Accounting ratio for each product.You must say what help you want!!
You must have a printed answer in the same book in which you found the question, and so there is no point in me simply providing an answer!
Say which bit of the answer you are not clear about and I will try and explain.(I do assume that you have watched my free lectures on throughput accounting? The lectures are a complete course for Paper F5 and cover everything needed to be able to pass the exam well.)
hi sir thx for reply. i already watched the lecture you delivered. and i also saw lecture which was about throughput exam question. but sir the above question i posted is very difficult for me and i think it has no sense for throughput. plz explain sir.
thanks in advanceOn the figures that you have typed, the question makes no sense.
The throughput contribution per unit is the selling price per unit less the material cost per unit.
For B and C this is not the case from the figures that you have typed, which is why the question makes no sense at all.You should be using a Revision Kit from one of the ACCA approved publishers – they contain exam standard questions (which this question is not), together with answers and workings.
@jhanzebk said:
plz help in this question
Hi Sky Ltd., produces three products, A, Band Cí. The capacity of Hi Skyís plant is restricted and all products pass through a single process. This process is expected to be operational for 7 hours per day and can produce 1,600 units of A per hour, 1,800 units of B per hour, and 800 units of C per hour. Conversion costs are Rs. 600, 000 per day. Selling prices and material costs for each product are as follows:
selling price material cost throughput contribution per unit
A 160 80 80
B 140 50 90
C 280 110 170
Required:
(i) Calculate the profit per day if daily output achieved is 4,000 units of A, 3,500 units of B and 1,000 units of c
Determine the efficiency of the bottleneck process given the output in (i) above.
(iii) Calculate the Throughput Accounting ratio for each product.hi sir John
you are doing very good job to help student free of cost. actually me not student of ACCA but here i came to clear my concept because my sub of management accounting(ACMA pak) has some similar topic of f5.Thank you for your comment.
Now that you have retyped the question it does make more sense 🙂
For part (i) you can calculate the total throughput by multiply the units of each product by the throughput per unit, adding them all up, and then subtracting the conversion costs of $600,000.
For part (ii), you know the throughput contributions per unit, and you need to calculate the throughput return per hour for each of the products.For example, each unit of A takes 1/1600 hours, and so the throughput return per hour equals 80 / (1/1,600) = $128,000.
The cost per factory hour = $600,000 / 7 = $85,714.
So the TAR for product A = 128,000 / 85,714 = 1.49
It is the same approach for each of the other two products.
Sir John Moffat
now i pick the point thanks a lot for solving the hurdle. if i post more topic will u help?
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