Question 2 5. (a) Distinguish, giving suitable examples, the differences between marginal costing and throughput analysis (TA). [7 marks] (b) Dragon plc is a small manufacturing company which produces two products. The selling price, materials, labour and overhead costs per unit are shown in the table below. The new management accountant has identified the availability of skilled labour hours as the limiting factor and has advised that throughput analysis is used to determine the optimum profit, given the constraint. Economy 275 Superior 325 Selling Price Materials Labour Variable overhead costs Fixed costs 90 40 20 25 165 30 15 30 Profit 100 85 Skilled labour hours per unit Maximum Demand (units) 2 15,000 1 5,000 You are also told that: i. the total number of skilled labour hours available are 32,500 hours. ii. the fixed costs are based on the per unit production of the two products, Required: To produce a production plan to maximise profit given the skilled labour hour constraint. [15 marks] (c) Critically discuss the main criticisms levelled at the Theory of Constraints (TOC) and Throughput Analysis (TA). [8 marks] Total mark 30 (LOs1 and 2)