Business Process Performance Paper 4


Tocon Company produces two components: A-1 and A-2. The unit throughput contribution margins for A-1 and A-2 are $150 and $300, respectively. Each component must proceed through two processes: Operation 1 and Operation 2. The capacity of Operation 1 is 180 machine hours, with A-1 and A-2 requiring 1 hour and 3 hours, respectively. Furthermore, Tocon can sell only 45 units of A-1 and 100 units of A-2. However, Tocon is considering expanding Operation 1’s capacity by 90 machine hours at a cost of $80 per hour. Assuming that Operation 2 has sufficient capacity to handle any additional output from Operation 1, Tocon should produce Units of A-1 Units of A-2


In a theory of constraints (TOC) analysis, the bottleneck operation (the constraint) corresponds to which part of the drum-buffer-rope model?


The process model used in a theory of constraints (TOC) analysis is called


Which pairs of systems are considered complementary because they inherently focus on different time frames?


The following steps make up the stages of a theory of constraints (TOC) analysis.
I. Determine the most profitable product mix given the constraint.
II. Increase capacity at the constraint.
III. Identify the constraint.
IV. Redesign the manufacturing process.
V. Maximize the flow through the constraint.
If executed in the correct order, the sequence is


A company uses a planning system that focuses first on the amount and timing of finished goods demanded and then determines the derived demand for raw materials, components, and subassemblies at each of the prior stages of production. This system is


A company is preparing the sales budget for two potential products. Both products require the use of the same manufacturing equipment, which is only available for 60 hours each month. The contribution margin of Product A is $95 per unit, and the contribution margin of Product B is $55 per unit. Product A requires 4 hours of machine time per unit, and Product B requires 2.5 hours per unit. In order to efficient company should manufacture


Assume that a manufacturing firm maintains its product cost accounting records using throughput costing. At the end of the fiscal year,


When using throughput costing, inventoriable costs would include only


Bandito Company sells product XRP for $180 per unit. Overhead is allocated based on direct labor hours. Bandito estimates overhead to be $600,000 per month, which is 40% variable and 60% fixed. Direct labor hours budgeted per month for the entire factory total 100,000 hours, and the hourly direct labor rate is $9. Product XRP requires $64 of direct material per unit and 2 hours of direct labor. Bandito has begun using throughput costing. If Bandito produces and sells 20,000 units of XRP this month, the total throughput contribution is


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