ACCA Applied Skills · Performance Management · Throughput accounting
Kestrel Ltd has 900 bottleneck hours available. Product P: throughput $48 per unit, 4 hours per unit, demand 150 units. Product R: throughput $27 per unit, 1.5 hours per unit, demand 400 units. Factory costs are $11,000. Calculate the maximum profit.
Maximum profit is $3,400, but this value is not among the options, so the item is flawed.
- A$3,800Correct
- B$1,000
- C$4,500
- D$2,600
Explanation
P gives 48/4 = $12 per hour; R gives 27/1.5 = $18 per hour. R ranks first: 400 units use 600 hours, leaving 300 hours for P = 75 units. Throughput = 400x27 + 75x48 = 10,800 + 3,600 = 14,400. Less factory costs 11,000 = $3,400.
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One question tells you little. A timed set on Throughput accounting shows your real accuracy, how long you take and where you lose marks.
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