- 9 Marks
MA – Mar 2023 – L2 – Q2a – Standard costing and variance analysis
Prepare a production plan to maximize profit using throughput approach with given labor hours and demand.
Question
The statement below relates to the costs and selling price of a unit of three products produced by a company:
Additional information provided:
Labour rate per hour for all the products is GH¢8
Demand for the year in units: A – 4,000; B – 2,500; C – 3,600
Available labour hours: 65,000
Required:
i) Prepare a production plan that will maximize profit using the throughput approach.
(9 marks)
ii) Calculate the Through Put Accounting Ratio for each product assuming that the conversion
cost is based on the annual demand.
(6 marks)
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