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Q 29. Huron Ltd manufactures a product called the GL1. The GL1 requires five hours of machine time. Machine time is a bottleneck resource, as there are only four machines which are available eight hours a day, five days a week. Each GL1 sells for 210 and has direct material costs of $26 per unit, labour costs of $19 per unit and factory overhead costs of $15 per unit. These costs are based on weekly production and sales of 150 units.
What is the throughput accounting ratio (to 2 decimal places)?Answer: 1.15
Kindly give the solution to come out this answer.
Thanks Teacher Moffat.
May
Teacher,
I have calculated that 36.8 / ((15×150)+(19×150)) / (150 x 5hrs) = 5.41
Please correct me.
Thanks.May
The throughput return is (210 – 26) / 5 = $36.8
The total factory cost is 150 x (15 + 19) = $5,100 per week.
The total machine hours is 4 x 8 x 5 = 160 hours per week.Therefore factory cost per hour = 5100/160 = $31.875
Therefore the TAR = 36.8 / 31.875 = 1.15
Thank you so much Teacher. At the total machine hours, 4 is number of machine?
May
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