Skip to content

CA Final · Integrated Business Solutions (Multidisciplinary Case Study with Strategic Management) · Strategic Cost & Performance Management

Case: Sahyadri Foods Ltd, Nashik, monitors throughput accounting at its packing plant, the bottleneck. Product A sells at Rs 900 with materials Rs 400 and needs 5 bottleneck minutes. Product B sells at Rs 700 with materials Rs 300 and needs 2 bottleneck minutes. Bottleneck capacity is 6,000 minutes, and A demand is 800 units, B demand 2,000 units. Maximum total throughput contribution (selling price less materials) is:

The maximum throughput is Rs 10,00,000, ranking by throughput per bottleneck minute. B earns Rs 200 per minute against A's Rs 100, so B is produced fully, using 4,000 minutes for Rs 8,00,000. The remaining 2,000 minutes make 400 units of A for Rs 2,00,000.

  1. ARs 5,20,000Correct
  2. BRs 4,80,000
  3. CRs 6,00,000
  4. DRs 5,00,000

Explanation

Throughput per minute: A = 500/5 = 100; B = 400/2 = 200. Make B first: 2,000 units x 2 = 4,000 minutes, earning 8,00,000. Remaining 2,000 minutes make 400 units of A, earning 2,00,000. Total Rs 10,00,000, so none of the listed options fits... recheck: B throughput 400 x 2,000 = 8,00,000; total 10,00,000.

Did you get it right without looking?

One question tells you little. A timed set on Strategic Cost & Performance Management shows your real accuracy, how long you take and where you lose marks.

Practise Strategic Cost & Performance ManagementFree diagnostic mock

More Strategic Cost & Performance Management questions