throughput accounting ratio — OpenTuition Forums

Kkelly10y ago

Hi mike, please help me with this, Corries produces 3 products, x,y&z. The capacity of corrie's plant is restricted by process alpha . Process alpha is expected to be operational for 8 hours per day and can produce 1200 units of x per hour,1500 units of y per hour and 600 units of z per hour. Conversion costs are 720 000 per day Products Selling price $per unit material cost $per unit throughput $per unit X 150 70 80 120 40 80 Y Z 300 100 … 200 I Didnt understand how to convert the units into hours

John MoffatTutor10y ago#1

Mike does not teach Paper F5 for us (and never has) !!! For product X, the throughput return = $80 per unit. They can produce 1,200 units per hour, and therefore each unit takes 1/1,200 hours = 0.00083333 hours Therefore the return per factory hour = 80 / 0.00083333 = $96,000. (Or, if you think about it, if they can produce 1,200 units in 1 hours, and if each of those units gives $80, then over 1 hours they will get a return of 1,200 x $80 = $96,000) Same approach for Y and Z

Kkelly10y ago#2

thank you sir, God continue to bless you

John MoffatTutor10y ago#3

You are welcome :-)

Sign into reply to this topic.