Olu Inc. makes three different products, Lax, Cob and Exe. Department B has been identifiedas the bottleneck. In this department, the three products use the same two machines whichcan only be operated eight hours a day and five days a week. Further information are givenbelow:Estimated monthlyproduction (units)Selling price per unitMaterial costs per unitLabour costs per unitHours required inDepartment B for 100 unitsProduct Lax4,000£40.00£18.00£12.602Product Cod6,000£38.00£20.00£8.303Monthly labour and factory overheads are constant at £195,000.Product Exe10,000£52.50£22.00£10.003.5Question 6: What is the throughput contribution for one unit of product 'Lax'? £

Calculation of Total Available Hours in a week=8 hours * 5 days * 4 weeks= 160 hoursCalculation of…

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What is the throughput contribution for one unit of product 'Lax'? £

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Olu Inc. makes three different products, Lax, Cob and Exe. Department B has been identified
as the bottleneck. In this department, the three products use the same two machines which
can only be operated eight hours a day and five days a week. Further information are given
below:
Estimated monthly
production (units)
Selling price per unit
Material costs per unit
Labour costs per unit
Hours required in
Department B for 100 units
Product Lax
4,000
£40.00
£18.00
£12.60
2
Product Cod
6,000
£38.00
£20.00
£8.30
3
Monthly labour and factory overheads are constant at £195,000.
Product Exe
10,000
£52.50
£22.00
£10.00
3.5
Question 6: What is the throughput contribution for one unit of product 'Lax'? £

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