(3) In order to be able to meet increased demand, CBF Co bought
another assembly machine, so doubling capacity. The quality control
and packaging machines were also modified, so increasing their
capacity by 70% and 40% respectively. The per unit factors of sales
price, material cost and machine time remain unaltered.
thrived and the maximum demand for each product
The economy
rose to 1,500 Alpha, 2,750 Beta and 900 Gamma. Operating
expenses increased by 30% and the packaging machine became
the bottleneck. Weekly profit maximising output has been calculate
c
as 1,500 Alpha, 2,460 Beta and 900 Gamma giving a weekly profit
of $1852.40.
What is the throughput accounting ratio at this profit
Maximising level of output, to two decimal places?
A 1.36
B 0.356
C 1.76
D 0.46
thanks in advance
Ask the Tutor ACCA PM
Throughput Accounting - not sure how they get the figures
8y ago#1You have not given enough information. I would guess this is part of a Section B type question, in which case the information in the scenario is needed as well.
Oops here’s the rest thanks:
After manufacture, each heater has to go through three processes Assembly, Quality control and Packaging.
________________________Alpha_______Beta________Gamma
Sales_per unit_____________$2.00______$2.25__________$1.75
Direct materials per unit_____$0.5________$0.81_________$0.35
Direct labour per unit_______$0.3_________$0.6__________$0.5
Machine time per unit:
Assembly minutes___________2___________3____________2.5
Quality Control minutes_______3___________4____________2
Packaging minutes____________4___________5____________3
Weekly sales demand______1000units_______1500units____850units
Operating expenses, including labour and $4000
Maximum machine hours available are 150 Assembly, 170 Quality Control, 250Packaging
8y ago#3The new operating expenses are 4,000 + 30% = 5,200.
Since the profit is 1852.40, the throughput return must be 1852.40 + 5200 = 7052.40
Therefore the TAR = 7052.40 / 5200 = 1.36
(You could divide both by the total hours in the bottleneck (packing) to get the return per hour and the cost per factory hour, but since you would be dividing both by the same number of hours the answer will be the same.)
Good evening sir.
Please how was the bottle neck established? I don't know how 143.75 was gotten for Assembly hours, 178.33 for Quality control hours and 234.17 for the packaging hours.
6y ago#5The question tells you that packaging is the bottleneck - you do not need to establish it.
Good evening, Sir.
Could you kindly explain please how we identified actual hours required: 143.75 for Assembly hours, 178.33 for Quality control hours and 234.17 for the packaging hours
6y ago#7For assembly: (1,000 x 2) + (1,500 x 3) + (850 x 2.5) = 8,625 minutes which is 8,625/60 =
143.75 hours.
It is the same workings for the other two.
Whats the meaning of this line = to increase efficiently of the machine???
In mean to say That in throughtput Accounting to Eliminate Bottleneck we do the following steps
First =we buy a new machine if are finance allows us to do.
Second = we can incerase the efficiency of the machine (so this point i did not get)
One point i did not Get either what does this means ‚‘‘to increase efficiency of the bottleneck‘‘.
6y ago#10Increasing the efficiency means getting it to work faster.
God bless u always.
Thank you
6y ago#12You are welcome :-)
This topic is locked — no new replies.