Calculate the throughput accounting ratio

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Question: ABC Limited is the manufacturer of mobile phone units which requires 4 hours of Machine Time to produce each unit. Machine Time has been identified as a bottle neck resource at the Company with only ten machines available for 12 hours per day, five days per week. The product has a selling price of £130 per unit, direct material costs of £50 per unit, labour costs of £40 per unit and factory overhead costs of £20 per unit. These costs are based on weekly production and sales of 150 units.

Required:

a) Calculate the throughput accounting ratio.

b) Companies can minimise their profitability by adopting different types of pricing strategies. Explain in detail different types of pricing strategies available to companies.

Reference no: EM133007209

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