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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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
Transcribed Image Text:Scratch Pad kethrough Calculator 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
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