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Dear Sir,
Good day to you.This is a question from the BPP Revision Kit:-
—–Scenario—-
Corrie
Restricted process: Alpha ( 8 hours per day: X=1200 units/hr, Y=1500 units/hr, Z=600 units/hr)Throughput contribution/unit: (X=$80, Y=$80, Z=$200)
Conversion Costs: $720,000 per dayWhat is the conversion cost per factory hour?
Answer: $90,000If the question were to be changed to:
What is the throughput per factory hour?What would the answer be?
Just a hypothetical question to cover my areas of doubt.
Appreciate your kind help SirX gives a throughput contribution of $80 per unit and they produce 1,200 units per hour.
Therefore the throughput contribution per hour is 1,200 x $80 = $96,000.
It would be similar workings for each of Y and Z.
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