(Answers with explanation)

Question 1

Product Kleen is manufactured through a production process where the machine time is the bottleneck resource. One unit of Kleen requires 0.6 machine hours. The costs and selling price of Product Kleen are as follows:

	$
Materials	30
Labour (0.5 hour)	18
Other factory costs	2
Total	50
Sales price	64
Profit	9

Given that throughput accounting is followed, what is the throughput accounting ratio for Product Kleen? (Round to 1 decimal place).

1. 1.3
2. 28.3
3. 1.7
4. 16.7

Question 2

Alpha is preparing a standard cost card for Xavy, a new product. Labour is paid at 20 per hour. Batch 1 took 90 hours, and an 80% learning rate is expected. This is expected to cease after 45 batches have been produced.

What is the labour cost per unit that should be included in the standard cost card for Xavy, to the nearest ?

1. 18
2. 360
3. 528
4. 1,800