Assessment Tasks with Case study You have been appointed assistant to the management accountant at Mazee Ltd. You have been asked to complete the following FOUR tasks. Task 2 A. Briefly explain the concept of Throughput Accounting and explain THREE fundamental features. (5 Marks) B. Mazee Ltd produces two types of components, the Oak and the Ash. The Oak has come under severe competitive pressure in recent years, whereas the Ash is a market leading product. The company is keen to maximize profitability and has identified a bottleneck resource as an assembly machine, XYZ. The XYZ operates for 10 hours per day and factory costs are 5,000 per day. Details of the products are as follows: Product Selling price per Material unit per unit cost Number of units made per hour on machine XYZ Oak 16 9 80 units per hour Ash 24 13 60 units per hour Required: Calculate the Throughput Accounting Ratio (TPAR) per hour for each product. (12 marks) C. Mazee Limited uses the Accounting Rate of Return (ARR) to evaluate investments. Identify THREE limitations of this approach to evaluating the risk and return of an investment AND recommend an alternative technique which might overcome these limitations. (8 marks) Present value table Present value of 1 ie (1+r)^ where r = interest rate, n = number of periods until payment or receipt. Periods Interest rates (1) (n) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 2 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 6 0.942 0.888 0.837 0.790 0.746 0.705 0.666 0.630 0.596 0.564 7 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.513 8 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 9 0.914 0.837 0.766 0.703 0.645 0.592 0.544 0.500 0.460 0.424 10 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 11 0.896 0.804 0.722 0.650 0.585 0.527 0.475 0.429 0.388 0.350 12 0.887 0.788 0.701 0.625 0.557 0.497 0.444 0.397 0.356 0.319 13 0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.368 0.326 0.290 14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263 15 0.861 0.743 0.642 0.555 0.481 0.417 0.362 0.315 0.275 0.239 16 0.853 0.728 0.623 0.534 0.458 0.394 0.339 0.292 0.252 0.218 17 0.844 0.714 0.605 0.513 0.436 0.371 0.317 0.270 0.231 0.198 18 0.836 0.700 0.587 0.494 0.416 0.350 0.296 0.250 0.212 0.180 19 0.828 0.686 0.570 0.475 0.396 0.331 0.277 0.232 0.194 0.164 20 0.820 0.673 0.554 0.456 0.377 0.312 0.258 0.215 0.178 0.149 Periods Interest rates (1) (n) 11% 12% 14% 15% 16% 1 2 3 4 5 0.901 0.812 0.731 0.659 0.593 0.893 0.797 0.712 0.636 0.567 13% 0.885 0.783 0.693 0.613 0.543 0.877 0.769 0.675 0.592 0.519 0.870 0.756 0.658 0.572 0.497 0.862 0.743 0.641 0.552 0.476 6 7 8 9 10 0.535 0.482 0.434 0.391 0.352 0.507 0.452 0.404 0.361 0.322 0.480 0.425 0.376 0.333 0.295 0.456 0.400 0.351 0.308 0.270 0.432 0.376 0.327 0.284 0.247 0.410 0.354 0.305 0.263 0.227 17% 18% 19% 20% 0.855 0.847 0.840 0.833 0.731 0.718 0.706 0.694 0.624 0.609 0.593 0.579 0.534 0.516 0.499 0.482 0.456 0.437 0.419 0.402 0.390 0.370 0.352 0.335 0.333 0.314 0.296 0.279 0.285 0.266 0.249 0.233 0.243 0.225 0.209 0.194 0.208 0.191 0.176 0.162 0.178 0.162 0.148 0.135 0.152 0.137 0.124 0.112 0.130 0.116 0.104 0.093 0.111 0.099 0.088 0.078 0.095 0.084 0.074 0.065 0.081 0.071 0.062 0.054 0.069 0.060 0.052 0.045 0.059 0.051 0.044 0.038 0.051 0.043 0.037 0.031 0.043 0.037 0.031 0.026 11 12 13 14 15 0.317 0.286 0.258 0.232 0.209 0.287 0.261 0.257 0.231 0.229 0.204 0.205 0.181 0.183 0.160 0.237 0.215 0.195 0.208 0.187 0.168 0.182 0.163 0.145 0.160 0.141 0.125 0.140 0.123 0.108 0.123 0.107 0.093 0.108 0.093 0.080 0.095 0.081 0.069 0.083 0.070 0.060 0.073 0.061 0.051 16 17 18 19 20 0.188 0.170 0.153 0.138 0.124 0.163 0.146 0.130 0.116 0.104 0.141 0.125 0.111 0.098 0.087