1. avatar says

    Brilliant lecture sir! :) I have a question though, after finishing the lecture on this chapter I’m about to read the student article on it. I found this one from opentuition:

    and this one from ACCA website:

    Should I read the opentuition or or the one from acca website?

    Thank you sir :)

    • Avatar of johnmoffat says

      Read all of them (the OpenTuition one also appeared in Student Accountant – however, it was a while ago so ignore the bit on Backflush accounting because that has been removed from the syllabus).

      However, do not spend too much time on them – Throughput accounting was asked in December and so although it could be asked again in June it is rather unlikely.

  2. avatar says

    the lecture was great and well understood,but what if in the event you have more than 1 bottle neck?do we just solve as same with the example above applying same method to the other bottle necks?


    • Avatar of johnmoffat says

      The only way that you could have more than one bottleneck would be if two or more processes had exactly the same limits.
      This will not happen in the exam (and is unlikely in practice). However the solution would be to ‘amalgamate’ the processes and do the arithmetic as though it was one process.

  3. Avatar of pfirsch2012 says

    Dear Sir, thank you very much for the great lecture!
    I still have a question about the throughput accounting ratio (TPAR) though. In the exam when we are asked to calculate the TPAR in a multi-product scenario, should we calculate the TPAR for each product individually or for all the products as a whole? What I mean by ‘as a whole’ is to get only one TPAR by using the total throughput at the optimum production plan.
    Looking forward to your answer! Cheers!

    • avatar says

      I’ll second that – fantastic lecture! I’ve been struggling with the Kaplan material. Watching the lecture I found that I was understanding the whole process and could follow each step and it’s now all making sense. I’m a lot more confident now if this comes up in the exam. A big thank you!

  4. avatar says

    Good lecture. It seems a little strange to me that you calculate your fixed cost based on your original budgeted hours in throughput accounting considering they won’t be your fixed costs as you won’t be working to maximum capacity but if that’s they way to do then that’s they way I’ll do it.

      • avatar says

        True but then why have a fixed cost per unit (as shown in example 2 page 17 as this would change depending on the number of units produced. The fixed cost should just be given as an amount really no? I understand by definition it shouldn’t change just seems a contradictory that it is fixed per unit and not fixed up to a certain production volume.

      • Avatar of johnmoffat says

        The cost card has been prepared using absorption costing (because fixed costs are there – they have been absorbed into the unit cost).

        However this is not assuming that the actual fixed cost per unit stays the same. The cost card is prepared using budget figures i.e. budget total fixed costs and budget production (in order to, for example, help decide on what selling price to charge).

        However, in both conventional contribution analysis (example 1) and throughput accounting (example 2) we assume that the total fixed costs will stay the same. That is why we have calculated the total budgeted fixed costs (using budget production and budget cost per unit) and then assumed that that total remains fixed,

        (Absorption costing and marginal costing are not examined specifically in F5 because they were in F2, but the ideas are relevant in, for example, the examples in this chapter. If you want more on absorption and marginal (and the reasons in practice for choosing one method or the other) have a look at the lectures for F2)

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