Calculator Scratch Pad Fram Co is involved in the processing of sheet metal into products A, B and C using three processes, pressing, stretching and rolling. Information about the three products (per metre) is as follows: Product A Product B Product C $ $ $ Selling price 70.0 60.0 70.0 Variable costs: Materials 3.0 2.5 10.0 Labour 10.0 10.0 15.0 Other factory costs are all fixed and total $17,975,000 per year. Raw material for the sheet metal is first pressed then stretched and finally rolled. The pressing process has been identified as the bottleneck and the factory manager has provided the following data: Pressing time per metre Product A Product B Product C 26 of 34 Close All P Flag for Revie Using throughput accounting, how many metres of each product should be made per year in orde to maximise profit? CO Product A: 200,000 Product B: 200,000 Product C: 25,000 O Product A: 200,000 O Product A: 200,000 Product B: 200,000 Product B: 90,000 Product B: 0 Product C: 200,000 Product C: 200,000 Product C: 0 O Product A: 450,000
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Fram Co is involved in the processing of sheet metal into products A, B and C using
three processes, pressing, stretching and rolling.
Information about the three products (per metre) is as follows:
Product A
Product B
Product C
$
$
Selling price
70.0
60.0
70.0
Variable costs:
Materials
3.0
2.5
10.0
Labour
10.0
10.0
15.0
Other factory costs are all fixed and total $17,975,000 per year.
Raw material for the sheet metal is first pressed then stretched and finally rolled. The
pressing process has been identified as the bottleneck and the factory manager has
provided the following data:
Pressing time per metre
Product A
Product B
Product C
Hours
0.50
0.50
0.40
There are 225,000 hours of pressing time available each year.
Maximum demand for each product is 200,000 metres per year.
Help/Formulae Sheef Rexiow Soroon
26 of 34
Close All P Flag for Revie
Using throughput accounting, how many metres of each product should be made per year in order
to maximise profit?
O Product A: 200,000
O Product A: 200,000
O Product A: 200,000
Product B: 200,000 Product C: 25,000
Product B: 200,000
Product B: 90,000
Product B: 0
Product C: 200,000
Product C: 200,000
Product C: 0
O Product A: 450,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fce5672f0-fbc1-4ece-b472-7e6cc578fbb1%2Fa0f25ef9-94a1-4d20-8ef9-101ab7920274%2Fy6ye86p_processed.jpeg&w=3840&q=75)
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