Yinu Inc. makes three different products, D, Land B and Department X has been identified as...

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Yinu Inc. makes three different products, D, Land B and Department X has been identified as the bottleneck. In this department all three products use the same four machines which can only be operated eight hours a day and five days a week. Further information are given below: Product D Product L Product B 55,000 Estimated 24,000 30,000 production (units) Selling price per £1.00 £0.80 £1.20 unit Material costs per unit Labour costs and factory overhead cost for 10 units Hours required in Department X for 100 units £0.25 £0.15 £0.28 £4 £0.20 £1 2 5 3 Monthly labour and factory overheads are constant at £18,500. Calculate the throughput accounting ratio for each of the three products. [6 marks) Advise the management of Yinu Inc. on the number of units to make for each a. b. product in a month. [3 marks) C. Comment on other factors Yinu Inc. could consider to maximise their operating profit given the bottleneck resource. [3 marks) Yinu Inc. makes three different products, D, Land B and Department X has been identified as the bottleneck. In this department all three products use the same four machines which can only be operated eight hours a day and five days a week. Further information are given below: Product D Product L Product B 55,000 Estimated 24,000 30,000 production (units) Selling price per £1.00 £0.80 £1.20 unit Material costs per unit Labour costs and factory overhead cost for 10 units Hours required in Department X for 100 units £0.25 £0.15 £0.28 £4 £0.20 £1 2 5 3 Monthly labour and factory overheads are constant at £18,500. Calculate the throughput accounting ratio for each of the three products. [6 marks) Advise the management of Yinu Inc. on the number of units to make for each a. b. product in a month. [3 marks) C. Comment on other factors Yinu Inc. could consider to maximise their operating profit given the bottleneck resource. [3 marks)

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a Throughput accounting Ratio Machine hours per month available with department X Limiting factor 8 ... View the full answer