1. CLC Ltd manufactures three products, A, B and C. Product details are as follows: Sales...
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1. CLC Ltd manufactures three products, A, B and C. Product details are as follows: Sales price (£) Material cost (£) Direct labour cost (£) Weekly sales demand Machine hours per unit Product A 2.60 1.20 1.00 4,000 units 0.5 hours Product B 1.80 0.60 0.80 4,000 units 0.2 hours Product C 2.20 1.00 0.80 5,000 units 0.3 hours Machine time is a bottleneck resource and maximum capacity is 3,800 machine hours per week. Operating costs including direct labour costs are £10,000 per week. Direct labour workers are not paid overtime and work a standard 38-hour week. (b) Summarize and illustrate the theory of constraints. Required: (a) Determine the optimum production plan for CLC Ltd and calculate the weekly profit that would arise from the plan. (15 marks) (5 marks) (c) Explain five differences between conventional cost accounting and throughput accounting. 1. CLC Ltd manufactures three products, A, B and C. Product details are as follows: Sales price (£) Material cost (£) Direct labour cost (£) Weekly sales demand Machine hours per unit Product A 2.60 1.20 1.00 4,000 units 0.5 hours Product B 1.80 0.60 0.80 4,000 units 0.2 hours Product C 2.20 1.00 0.80 5,000 units 0.3 hours Machine time is a bottleneck resource and maximum capacity is 3,800 machine hours per week. Operating costs including direct labour costs are £10,000 per week. Direct labour workers are not paid overtime and work a standard 38-hour week. (b) Summarize and illustrate the theory of constraints. Required: (a) Determine the optimum production plan for CLC Ltd and calculate the weekly profit that would arise from the plan. (15 marks) (5 marks) (c) Explain five differences between conventional cost accounting and throughput accounting.
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Answer rating: 100% (QA)
a To determine the optimum production plan for CLC Ltd we need to calculate the contribution margin per unit of each product The contribution margin is the difference between the sales price and the v... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
Posted Date:
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