One of the products manufactured by a company is Product X, which sells for 40 per unit and has a material cost of 10 per unit and a direct labour cost of 7 per unit. The total direct labour budget for the year is 50,000 hours of labour time at a cost of 12 per hour. Factory overheads are 2,920,000 per year.

 

The company is considering the introduction of a system of throughput accounting. It has identified that machine time as the bottleneck in production. Product X needs 0.01 hours of machine time per unit produced. The maximum capacity for machine time is 4,000 hours per year.

What is the throughput accounting ratio for Product X?