Cost Accounting Quiz
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DECISION MAKING USING COST INFORMATION
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A product is made in a three-step process: Mixing, Molding, and Curing.
* Mixing has the capacity to process 1,000 pounds of raw material per hour.
* Molding receives material from Mixing. It has a capacity to process 900 pounds per hour and has a 10% scrap rate (i.e., 90% yield).
* Curing receives molded items. It has a capacity to process 850 pounds per hour and has a 5% scrap rate (i.e., 95% yield).
Which process step is the bottleneck that limits the output of good, finished product?
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