Q1: AB Ltd makes two products, the A and the B. The factory is open five...
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Q1: AB Ltd makes two products, the A and the B. The factory is open five days a week for 50 weeks of the year. AB Ltd's machines can only work on one product at a time. The two products pass through two departments, using some skilled and some semi-skilled workers. The labour times needed in the departments are: Department 1 Department 2 A 12 18 Minutes per unit of product B 15 12 It is difficult to recruit staff to AB Ltd and so they can only utilise current staff, who are available for a maximum of 1,440 minutes in Department I and 972 minutes in Department 2 per day. Total factory costs for the year are $250,000 as per budget. The current selling prices and costs for the two products at AB Ltd are: A Selling price Direct materials Direct labour Variable overheads Fixed overheads Profit per unit $ per unit 45.00 8.00 6.00 3.10 8.33 19.57 Required: (i) Identify the bottleneck and support your answer with figures. B S per unit 50.00 17.50 6.60 7.50 10.42 7.98 (5 marks) (5 marks) Calculate the throughput accounting ratio for each product. Calculate the optimal production plan and total profit on each day using throughput analysis. (6 marks) Q1: AB Ltd makes two products, the A and the B. The factory is open five days a week for 50 weeks of the year. AB Ltd's machines can only work on one product at a time. The two products pass through two departments, using some skilled and some semi-skilled workers. The labour times needed in the departments are: Department 1 Department 2 A 12 18 Minutes per unit of product B 15 12 It is difficult to recruit staff to AB Ltd and so they can only utilise current staff, who are available for a maximum of 1,440 minutes in Department I and 972 minutes in Department 2 per day. Total factory costs for the year are $250,000 as per budget. The current selling prices and costs for the two products at AB Ltd are: A Selling price Direct materials Direct labour Variable overheads Fixed overheads Profit per unit $ per unit 45.00 8.00 6.00 3.10 8.33 19.57 Required: (i) Identify the bottleneck and support your answer with figures. B S per unit 50.00 17.50 6.60 7.50 10.42 7.98 (5 marks) (5 marks) Calculate the throughput accounting ratio for each product. Calculate the optimal production plan and total profit on each day using throughput analysis. (6 marks)
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Related Book For
Financial and Managerial Accounting
ISBN: 978-1285078571
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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