Mathematics · Throughput Accounting
A manufacturing company decides which of three mutually exclusive products to make on the basis of throughput accounting ratio. Machine hours are the bottleneck resource. Selling price, material cost, and machine hours per unit are: The Economic Times + 2 Product X: $60, $40, 10 hours Product Y: $40, $10, 20 hours Product Z: $20, $16, 2.5 hours Which of the following actions would improve the company's existing throughput accounting ratio?
- 1Reduce the material cost of product Y by 5%
- 2Reduce the material cost of product Z by 5%
- 3Increase the selling price of product Y by 10%
- 4Increase the selling price of product Z by 10%✓
Correct answer
Increase the selling price of product Z by 10%
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