Using the case of MN Ltd presented in the scenario where appropriate, and the throughput

accounting ratio defined in 30(a), answer the following:

(a) Explain the concept of throughput accounting.

(b) To what uses do advocates of throughput accounting suggest that the ratio be put?

(c) Suggest two other ratios which may be used by a company operating throughput accounting, and explain the use to which they may be put.

(d) Explain how the concept of contribution in throughput accounting differs from that in marginal costing.

(e) If MN Ltd has decided to purchase machine G and spend £100,000 on a major overhaul of machine X, the management accountant and the production manager should collaborate to ensure a new focus for monitoring and reporting production activities. What is the new focus? Explain what should be monitored and reported.