=+16-35 KK Theory of constraints, throughput contribution, quality, relevant costs OBJECTIVES 2, 5 Wylies Ltd manufactures pharmaceutical products in two departments: Mixing and Tablet-making. Additional information on the two departments follows. Each tablet contains 0.5 grams of direct materials.

Mixing Tablet-making Capacity per hour 150 grams 200 tablets Monthly capacity (2000 hours available in each department) 300 000 grams 400 000 tablets Monthly production 200 000 grams 390 000 tablets Fixed operating costs (excluding direct materials) $16 000 $39 000 Fixed operating cost per tablet ($16 000 ÷ 200 000 grams;

$39 000 ÷ 390 000 tablets) $0.08 per gram $0.10 per tablet The Mixing Department makes 200000 grams of direct materials mixture (enough to make 400000 tablets) because the Tabletmaking Department has only enough capacity to process 400000 tablets. All direct materials costs are incurred in the Mixing