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

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 3CE: Patz Company produces two types of machine parts: Part A and Part B, with unit contribution margins...
icon
Related questions
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'? £
Transcribed Image Text: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'? £
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Theory of Constraints (TOC)
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning