This topic contains 5 replies, has 3 voices, and was last updated by John Moffat 3 years ago.
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Home › Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA F5 Exams › BPP Q5 (exams in 2011 study text page 406) Bottlenecks
This topic contains 5 replies, has 3 voices, and was last updated by John Moffat 3 years ago.
Hi John
Do you have access to the above text book?
If so, please can you advise on the answer to the maximum profit calculation in question 5.b(i)?
I understand the profit maximising mix is A 144,000 units and B 13,000 units. These figures (number of units) are then used to calculate the throughput return (I understand). Why then does the calucation not use these units to calculate the variable cost. It uses the original estimate of sales / production A 120,000 units and B 45,000????
I think my brain is tired now!
Hope you can help.
John please note, the above should say “Why does the calculation not use these units to calculate the variable OVERHEAD cost”
That’s because if you re-read the (b) part of the requirement, it asks you to calculate the OH’s (that were variable in (a) part) based on estimated production/sales mix.
acca13 is correct. With throughput we are assuming that variable costs are fixed in the short-term (apart from materials) and therefore the total from part (a) stay the total.
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