- 4 Marks
MA – L2 – Q1 – Throughput Accounting
Question
Starco Ltd exports cases to Portugal. Each pallet of cases costs GH¢2,000 in material costs and is sold for GH¢3,000. Production and sales are limited by a shortage of highly trained quality control inspectors. Only 200 inspection hours are available per week. Every pallet is inspected, and an inspection takes 30 minutes.
Other factory costs are GH¢300,000 per week.
Required:
Calculate the throughput accounting ratio.
Answer
Throughput per pallet = GH¢3,000 – GH¢2,000 = GH¢1,000.
Throughput per inspection hour = GH¢1,000 / 0.5 hours = GH¢2,000.
Operating expenses per inspection hour = GH¢300,000 / 200 = GH¢1,500.
Throughput accounting ratio = GH¢2,000 / GH¢1,500 = 1.33.
- Topic: Throughput Accounting
- Uploader: Salamat Hamid