a) Using the Throughput Accounting method, determine the optimal production schedule, and calculate the Throughput Accounting ratios. Show all workings.
Link Components plc manufactures 2 products for the manufacture of electric motor vehicles, X and Y. |
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Cost information is as follows: |
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|
|
|
|
X |
Y |
Selling price |
……… |
……… |
…….. |
£37.50 |
£42.00 |
Materials |
……… |
……… |
…….. |
£13.50 |
£31.50 |
Labour |
……… |
……… |
…….. |
£ 6.00 |
£ 2.50 |
Other variable costs |
|
……… |
…….. |
£10.50 |
£ 2.00 |
Fixed costs |
……… |
……… |
…….. |
£ 4.50 |
£ 3.50 |
|
|
|
|
£34.50 |
£39.50 |
Profit |
……… |
……… |
…….. |
£ 3.00 |
£ 2.50 |
Machine hours per unit: 3 hours for product X and 1.5 hours for product Y. |
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Maximum demand: 30,000 units of product X, and 18,000 units of product Y. |
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The total machine hours available: 105,000 hours Required: a) Using the Throughput Accounting method, determine the optimal production schedule, and calculate the Throughput Accounting ratios. Show all workings. |
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