Lightwater Limited manufactures product BJK 55 which requires 2 hours of labour time. Labour hours are a scarce resource, due to limited expertise and staff. The company has 120 employees. Each employee works 8 hours per day.

The factory operates five days per week and 52 weeks annually. The company sells each unit of this product for $260 and the product uses direct material costing $70 per unit. The total factory costs are $180,000 per week.

Required:

a. Calculate the return per factory hour

b. Calculate the cost per factory hour 

c. Calculate the TPAR 

d. What decision should be made by management

Answer rating: 100% (QA)

a Return per factory hour The return per factory hour can be calculated by subtracting the direct material cost per unit from the selling price per un... View the full answer