decides which of three mutually exclusive products to make in its roducts is shown in the following table Product X Product Y Product Z $60 $40 $20 $40 $10 $16 10 20 2.5 direct materials) are $150,000. The company cannot make en s would improve the company's existing throughput ac f product Z by 10% product Y by 10% product Z by 5% roduct Y by 5%
decides which of three mutually exclusive products to make in its roducts is shown in the following table Product X Product Y Product Z $60 $40 $20 $40 $10 $16 10 20 2.5 direct materials) are $150,000. The company cannot make en s would improve the company's existing throughput ac f product Z by 10% product Y by 10% product Z by 5% roduct Y by 5%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![A manufacturing company decides which of three mutually exclusive products to make in its factory on the basis of maximising the company's throughput accounting ratio.
Current data for the three products is shown in the following table:
Product X
Product Y
Product Z
$20
Selling price per unit
$60
$40
Direct material cost per unit
$40
$10
$16
Machine hours per unit
10
20
2.5
Total factory costs (excluding direct materials) are $150,000. The company cannot make enough of any of the products to satisfy external demand entirely as machine hours are restricted.
Which of the following actions would improve the company's existing throughput accounting ratio?
Increase the selling price of product Z by 10%
Increase the selling price of product Y by 10%
Reduce the material cost of product Z by 5%
O Reduce the material cost of product Y by 5%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F90e39592-b66f-485f-972a-c2f3d7745b20%2Fe7d134a8-792f-40e7-9d25-6dd7c045efc3%2F3krmzvi_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A manufacturing company decides which of three mutually exclusive products to make in its factory on the basis of maximising the company's throughput accounting ratio.
Current data for the three products is shown in the following table:
Product X
Product Y
Product Z
$20
Selling price per unit
$60
$40
Direct material cost per unit
$40
$10
$16
Machine hours per unit
10
20
2.5
Total factory costs (excluding direct materials) are $150,000. The company cannot make enough of any of the products to satisfy external demand entirely as machine hours are restricted.
Which of the following actions would improve the company's existing throughput accounting ratio?
Increase the selling price of product Z by 10%
Increase the selling price of product Y by 10%
Reduce the material cost of product Z by 5%
O Reduce the material cost of product Y by 5%
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