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Question 6 (2 Marks) C1, D1

Product Kleen is manufactured through a production process where the machine time is the bottleneck resource. One unit of Kleen requires 0.6 machine hours. The costs and selling price of Product Kleen are as follows:

	$
Materials	30
Labour (0.5 hour)	18
Other factory costs	2
Total	50
Sales price	64
Profit	9

Given that throughput accounting is followed, what is the throughput accounting ratio for Product Kleen? (Round to 1 decimal place).

1. 1.3
2. 28.3
3. 1.7
4. 16.7

Question 7 (2 Marks) C1, D1

Alpha is preparing a standard cost card for Xavy, a new product. Labour is paid at 20 per hour. Batch 1 took 90 hours, and an 80% learning rate is expected. This is expected to cease after 45 batches have been produced.

What is the labour cost per unit that should be included in the standard cost card for Xavy, to the nearest ?

1. 18
2. 360
3. 528
4. 1,800

Question 8 (2 Marks) C1, D1

Which of the options below are true for throughput accounting?

1. Labour and material costs are not included in total factory costs
2. Products that are within the same factory could be ranked based on their return per hour as the cost per hour
3. Both above
4. None of the above

Question 9 (2 Marks) C1, D1

The standard direct material cost per unit for a product is calculated as follows: 10.5 litres at $2.50 per litre. No inventory of material is held. Last month the actual price paid for 12,000 litres of material used was 4% above standard and the direct material usage variance was $1,815 favourable.

What was the adverse direct material price variance for last month?

a.	$1,000
b.	$1,260
c.	$1,212
d.	$1,200

Question 10 (2 Marks) C1, D1

Last month a company budgeted to sell 8,000 units at a price of $12.50 per unit. Actual sales last month were 9,000 units giving total sales revenue of $117,000.

What was the sales price variance for last month?

1. $4,000 favourable
2. $4,500 adverse
3. $4,000 adverse
4. $4,500 favourable