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If conversion cost per factory hour is $80000. Calculate throughput accounting ratio?
Product X Y Z throughput contribution $ per unit 80 80 200
Product alpha is expected to be operational for eight hours per day and can produce 1200 units of X per hour, 1500 units of Y per hour , and 600 units of Z per hourPlease do not simply set me questions and expect an answer. You must have an answer in the same book in which you found the question, and you should ask about whatever it is in the answer that you are not clear about. Then I will explain.
The time taken to produce product X is 1/1,200 hours.
Therefore the throughput contribution per hour for Product X is 80/(1/1200) = $96,000
Therefore the TPAR = 96,000/80,000 = 1.20
It is similar workings for products Y and Z.
I do suggest that you watch my free lectures on throughput accounting. The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.
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