Tag (SQ): Production Constraints

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  • 4 Marks

MA – L2 – Q1 – Throughput Accounting

Calculate the throughput accounting ratio for Starco Ltd, exporting pallets to Portugal with limited inspection hours.

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.

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