CPA · Question 02 · Area 1: Business Analysis
A manufacturing company is analyzing its production process to identify bottlenecks. The process involves three sequential stages: Machining, Assembly, and Finishing. <br/><br/>- Machining capacity: 10,000 units/month<br/>- Assembly capacity: 8,000 units/month<br/>- Finishing capacity: 12,000 units/month<br/>- Current Demand: 9,000 units/month<br/><br/>The company implements a process improvement in Machining that increases its capacity to 11,000 units/month at a cost of $50,000. What is the impact on the company's total throughput?
Answer options:
Throughput remains unchanged at 8,000 units.
Throughput increases to 9,000 units to meet demand.
Throughput increases to 11,000 units.
Throughput increases to 8,500 units (average of capacities).
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