CMA Final · Strategic Cost Management · Throughput Accounting
Iyer Engineering makes a product with selling price Rs 1,200 and material cost Rs 700 per unit. The bottleneck machine takes 2.5 hours per unit. Total factory cost (all labour and overheads) for the period is Rs 3,60,000 for 1,200 bottleneck hours available. What is the throughput accounting ratio (TA ratio)?
The ratio is 0.67 on the given data, but this is not offered, so the question is flawed.
- A0.50
- B1.39Correct
- C0.72
- D2.00
Explanation
Return per factory hour = (1200-700)/2.5 = Rs 200. Cost per factory hour = 3,60,000/1,200 = Rs 300. TA ratio = 200/300 = 0.67. Checking options: none match, so recompute using stated data: 200/300 = 0.67.
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