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IMANET CMA Exam - Topic 12 Question 125 Discussion
Actual exam question for
IMANET's
CMA exam
Question #: 125
Topic #: 12
[All CMA Questions]
Topic #: 12
A manufacturer can sell its single product for $660.Below are the cost data for the product:
Direct Materials $170
Direct Labor 225
Manufacturing Overhead 90
The relevant margin amount when beginning a theory of constrains (TOC) analysis is
Suggested Answer:
A
A theory of constraints (TOC) analysis proceeds from the assumption that only direct materials costs are truly variable in the short run. This is Called throughput .or super variable, costing The relevant margin amount is throughput margin, Which equals price minus direct materials. Thus, the relevant margin amount for this manufacturer is $490 ($660-$170).
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