4.1 Example: throughput accounting Corrie produces three products, X, Y and Z. The capacity of Corrie's plant is restricted by process alpha- Process alpha is expected to be operational for eight hours per day and can produce 1,200 units of Xper hour, 1,500 units of Y per hour, and 600 units of Z per hour.. Selling prices and material costs for each product are as follows. Product X Y Selling price $ per unit 150 120. 300 Z Conversion costs are $720,000 per day. Required (a) Material cost $ per unit 80. 40 100 Throughput contribution. $ per unit 70 80 200 Calculate the profit per day if daily output achieved is 6,000 units of X, 4,500 units of Y and 1,200 units of Z. (b) Calculate the TA ratio for each product.
4.1 Example: throughput accounting Corrie produces three products, X, Y and Z. The capacity of Corrie's plant is restricted by process alpha- Process alpha is expected to be operational for eight hours per day and can produce 1,200 units of Xper hour, 1,500 units of Y per hour, and 600 units of Z per hour.. Selling prices and material costs for each product are as follows. Product X Y Selling price $ per unit 150 120. 300 Z Conversion costs are $720,000 per day. Required (a) Material cost $ per unit 80. 40 100 Throughput contribution. $ per unit 70 80 200 Calculate the profit per day if daily output achieved is 6,000 units of X, 4,500 units of Y and 1,200 units of Z. (b) Calculate the TA ratio for each product.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:4.1 Example: throughput accounting
Corrie produces three products, X, Y and Z. The capacity of Corrie's plant is restricted by process alpha-
Process alpha is expected to be operational for eight hours per day and can produce 1,200 units of Xper
hour, 1,500 units of Y per hour, and 600 units of Z per hour..
Selling prices and material costs for each product are as follows.
Product
Selling price
$ per unit
150
120.
Y
Z
300
Conversion costs are $720,000 per day.
Required
(a)
Material cost
$ per unit
80
40
100
Throughput contribution.
$ per unit
70
*.80
200
Calculate the profit per day if daily output achieved is 6,000 units of X, 4,500 units of Y and 1,200
units of Z.
(b) Calculate the TA ratio for each product.
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