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Q = Justin thyme manufactures four products A,B ,C,D. Details of sales prices, costs and recources requirement for each of the product are as follows:
Product A. Product B. Product C. Product D
Sales price. 1.40 .80 1.2 2.8
Material cost. .60 .30 .60 1.00
Direct labour cost. .40 .20 .40 1.00
Minutes Minutes Minutes Minutes
Machine time p.u 5 2 3 6
Labour time p.u. 2 1 2 5
Units Units Units Units
Weekly sales demand 2000 2000 2500 1500
Machine time is a bottleneck resource and the maximum capacity is 400 machine hours each week. Operating costs, including direct labour costs, are 5440 each week. Direct labour costs are paid for a 38 hour week with no overtime.
a) determine the quantities of each product that should be manufactured and sold each week to maximize profit and calculate the weekly point.
b) calculate throughtput accounting ratio at this profit-maximising level of output and sales.-I have understood very well sir what u explained in your lecture AND THATS WHY I AM ABLE TO DO TILL STEP 5 = allocate resources using ranking but in this question i am not understanding why we multiply machine hours = 400*60 = 24000
-i have done till step 5 but last step =allocate resources using ranking ….= in this my balancing Figure of product A is not coming correct
-in this why we r not factory cost 38*12
-direct labour Cost each week so why we do not multiply 5440*7Thank you in advance sir…god bless u always
It is difficult for me to answer properly because I do not know what ‘step 5’ is in the answer you refer to.
I do not understand why you want to multiply 5,440 by 7, because 5,440 is the factory cost which includes the direct labour cost.
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Allocate the resources using ranking
Product Units Machine minutes Throughput p.u Total throughput
D 1500 9000 1.80 2700
B 2000 4000 .50 1000
C. 2500 7500 .60 1500
________
20500.
A(balance) ???
I am not getting balanc of A correctD, B, and C are taking up 20,500 minutes of machine time.
In total there are 400 machine hours available, and since there are 60 minutes in an hour then there are 400 x 60 = 24,000 hours available.
Therefore the remaining hours are 24,000 – 20,500.
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Sir till here i know 3500 hours remaining but balancing figure of a A units
Product. Units
D. 1500
B. 2000
C. 2500
A?????balancing units??You know how much machine time each unit of A takes, and you know how many minutes are left for A, so you can calculate how many units of A they will make.
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God bless u always sir..
Thank you
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