Limiting Factors

paulabear01
paulabear01 Registered Posts: 1 New contributor ?
Can anyone help me please?

I need the formula for calculating machine hours/unit and contribution per machine hour.

I have an exam on Monday and my mind has gone totally blank and cant find the answer in my notes anywhere!!!!

Comments

  • Brough
    Brough Registered Posts: 6 Regular contributor ⭐ ? ⭐
    ?

    Are you talking about contribution per unit? = breakeven?

    Contribution per unit = selling price per unit - variable costs per unit

    fixed costs / contribution per unit = breakeven
  • mrspnut
    mrspnut Registered Posts: 70 ? ? ?
    It's just getting it clear in your head

    If you want to know the machine hours per unit then divide the machine hours required by the number of units produced.

    Contribution per machine hour is just contribution per unit divided by machine hour per unit - the two per unit bits cancel each other out and the figure you get is contribution per machine hour.

    Which book are you using because it's definitely in the Osborne one.
  • Brough
    Brough Registered Posts: 6 Regular contributor ⭐ ? ⭐
    Limiting Factors - Monthly Magazine

    If you need more information on Limiting Factors, go to your recent AAT monthly magazine, page 30, double spread explaining things!
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