throughput accounting and limiting factor analysis aie same thing. Briefly comment on whether throughput justily yo Direct materials: paper (book val inks (purchase accounting. State and accounting is likely to be of relevance to a compan)y (10 marks) Direct labour: skilled 250 hou unskilled 100 h Variable overhea Printing press de Fixed production Estimating depar CIMA Stage 3 Management Accounting Applications L JMS.2 Intermediate: Acceptance of a contract. JB Limited is small specialist manufacturer of electronic components and much of its output is used by the makers of aircraft for both civil and military purposes. One of the few aircraft manufacturers ha s offered a contract to JB Limited for the supply, over the next 12 months, of 400 identical components e data relating to the production of each component are as You are aware tha the company if yo must be very con The following follows: ) Material requirements 3kg material M1 - see note 1 below 2kg material P2 - see note 2 below 1 Part No. 678 - see note 3 below Note 1. Material M1 is in continuous use by the company. 1000kg are currently held in stock at a book value of 4.70 per kg but it is known that future purchases will cost 5.50 per kg 1 The paper 5000. I for some t 8000, w The produ use for the programm 2 The inks r be purcha Note 2. 1200kg of material P2 are held in stock. The original cost of this material was 4.30 per kg but as the material has not been required for the last two years it has been written down to 1.50 per kg scrap value. The only foreseeable alternative use is as a substitute for material P4 (in current use) but this would involve further processing costs of 1.60 per kg. The current cost of material P4 is 3.60 per kg Note 3. It is estimated that the Part No. 678 could be bought for 50 each programm 3 Skilled dire accommo of the time which a pr rate is pai 4 Unskilled l 200 hours printing wo hours wou concerned they would 5 Variable ov printing pre (ii) Labour requirements: Each component would require five hours of skilled labour and five hours of semi- skilled. An employee possessing the necessary skills is available and is currently paid 12 per hour. A replacement would, however, have to be obtained at a rate of 13 per hour for the work which would otherwise be done by the skilled employee. The current rate for semi-skilled work is 10 per hour and an additional employee could be appointed for this work (ii) Overhead: JB Limited absorbs overhead by a machine hour rate, currently 20 per hour of which 7 is for variable overhead and 13 for fixed overhead. If this contract is undertaken it is estimated that fixed 6 When not is hired to earns a co demand for