Accounting for Managers: Interpreting accounting information for decision-making

Table A3.6

(continued

)

(d)Product profitability 4: throughputSales £’000Contribution marginMfg overhead allocationGross profitLess non-mfg overheadNet profit

Cryod4,5002,100

0

Genet2,300

760

0

Yogen2,5001,350

0

Total9,3004,2103,500

710600110

Salesless:Direct materialsThroughput valueNo. machine hoursThroughput permachine hourT/A ranking

Cryod1,500

450

1,050

12

87.50

3

Genet1,150

600550

3

183.33

2

Yogen2,500

900

1,600

8

200.00

1

Product profitability 5: targetSales £’000

4,500

2,300

2,500

9,300

InvestmentRequired return 10%

Cryod3,000

300

Genet1,000

100

Yogen4,000

400

Total8,000

800

Contribution marginMfg overhead allocationGross profitLess non-mfg overheadNet profit

2,100

0

760

0

1,350

0

4,2103,500

710600110