ACCA PM · Chapter 4 · Question 1 of 10
Rho Co makes product P, which sells for $50 per unit and uses $20 of direct materials per unit. Each unit needs 0.5 hours on the bottleneck machine. Total factory costs (all labour and overheads) are $600,000 per year and 25,000 bottleneck hours are available per year. What is the throughput return per bottleneck hour for product P?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) $60
Explanation
Throughput per unit = selling price - direct materials = $50 - $20 = $30. Return per bottleneck hour = $30 / 0.5 hours = $60.
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