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  3. uni plc manufactures 2 cleaning products, a and b.

Uni plc manufactures 2 cleaning products, A and B. Selling price and cost information (Per...

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Question

Accounting

Uni plc manufactures 2 cleaning products, A and B. Selling price and cost information (Per Unit) is as follows:

Item

Product A

Product B

Selling price

50

56

Materials

16

40

Labour

10

4

Other variable costs

14

4

Fixed costs

6

4

Total costs

46

52

Profit

4

4

Additional information

  1. Machine hours Per Unit: 2 hrs product A and 1 hr product B.

  2. Maximum demand: 40,000 units of product A, and 20,000 units of product B.

  3. The total hours available are 98,000.

  4. Through-put per unit: selling price (per unit) - materials (per unit)

Required:

  1. (i) Using the Throughput Accounting method, determine the optimal production schedule. (30 marks)

  2. (ii) Prepare the Throughput profit statement (30 marks)

  3. (iii) Calculate the Throughput Accounting ratios and comment on the results. (10 marks)

  4. (iv) The operations manager at Uni Ltd argues that by focusing exclusively on financial performance, accountants provide no real solutions for improving the firm. Critique this perception. (30 marks)

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