Page 223 - P1 Integrated Workbook STUDENT 2018

Answers

Solution
Standard Ultra
Selling price per unit $80 $120
Material costs per unit $20 $24
Throughput $60 $96
Throughput per hour at bottleneck $60 $48
Production rank 1 2

Production plan:
Units Hours per Bottleneck Throughput
unit hours used $
Standard 40,000 1 40,000 2,400,000
Ultra 5,000 2 10,000 240,000
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2,640,000
Factory costs 2,000,000
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Gross profit 640,000
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Example 4

Calculate the throughput performance measures for Cled.

Solution

Standard Ultra
Return per factory hour $60 $48

Cost per factory hour = $2m/50,000 hours = $40

Throughput accounting ratio 1.50 1.20

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