• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Thoughtput accounting : doubts

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Thoughtput accounting : doubts

  • This topic has 7 replies, 2 voices, and was last updated 9 years ago by John Moffat.
Viewing 8 posts - 1 through 8 (of 8 total)
  • Author
    Posts
  • May 2, 2016 at 1:57 pm #313344
    Devnie
    Member
    • Topics: 10
    • Replies: 12
    • ☆

    Hi sir! This is regarding a throughput accounting sum from BPP revision kit Q18 Thin co. – private hospital….

    My doubt is in finding optimum product and the maximum profit
    This question is regarding a service

    To find the max profit what I did was just like for a product I found the optimum production(procedure) mix and then mutiplied by the throughput per procedure.
    Later deducted the total factory cost to derive at the profit.

    But what the marking scheme has done is they’ve taken the optimum hours (not procedures) and have multiplied that by the throughput per factory hour( not the throughput per hour) why is this?
    All this time I was thinking throughput per factory hour ( throughput per limiting factory) , we find that for RANKING purpose only. Why do we multiply by that to derive at the profit? Also why did they consider the hours not the procedures?

    Hope my doubt is clear for you to understand. Really sorry for the trouble.
    Thank you
    Devnie

    May 2, 2016 at 1:59 pm #313345
    Devnie
    Member
    • Topics: 10
    • Replies: 12
    • ☆

    Multiplied by throughout per factory hour ( not throughput per procedure) * sorry typing mistake

    May 2, 2016 at 2:36 pm #313352
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54696
    • ☆☆☆☆☆

    You can either multiply the procedures by the throughput per procedure, or alternatively multiply the house by the throughput per hour. Both will give the same result.

    (Have you watched our free lectures on throughput accounting? Our free lectures cover everything needed to be able to pass Paper F5 well.)

    May 2, 2016 at 7:26 pm #313385
    Devnie
    Member
    • Topics: 10
    • Replies: 12
    • ☆

    Yes sir I did watch your lectures and after that started trying out BPP revision kit sums. I tried to work out the profit in both ways, but it gives two different answers 🙁

    May 2, 2016 at 7:32 pm #313389
    Devnie
    Member
    • Topics: 10
    • Replies: 12
    • ☆

    Isn’t throughput per limiting factor calculated for ranking purpose only? Why do we use that to calculate profit. If you don’t mind can you explain me the logic behind it. In your lecture sir, you found profit by using total contribution less the factory overheads ( that is you found return with optimum production mix into return per unit , less total fixed cost) you did not consider return per factory our in profit calculations.

    Excuse me if I’ve misunderstood the concepts. Just a bit confused. 🙁

    May 3, 2016 at 8:10 am #313463
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54696
    • ☆☆☆☆☆

    You have misunderstood and I do suggest you watch the lecture again (because in the throughput example I certainly do not take the contribution less the fixed overheads!).

    In key factor analysis we rank by contribution per hour, and then the profit is the total contribution less the fixed overheads.

    Throughput accounting is exactly the same logic except that we assume all costs except for materials are fixed (and instead of using the word contribution for revenue less materials, we use the word throughput). So in throughput accounting we rank by throughput per hour (return per hour), and then the profit is the total throughput (return) less the total fixed overheads (which includes everything except materials).

    May 3, 2016 at 10:05 am #313500
    Devnie
    Member
    • Topics: 10
    • Replies: 12
    • ☆

    Okay sir! Thank you so much! Thank you for your time!
    I will re watch your lecture again.
    I should be okay after that 🙂

    Take care 🙂

    May 3, 2016 at 6:06 pm #313560
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54696
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 8 posts - 1 through 8 (of 8 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • dkessilfie on FM Chapter 1 Questions – Financial management objectives
  • ahmadhoney on ACCA Advanced Audit and Assurance (AAA) The Audit Report 3: Types of Audit Report
  • Bimasha@123 on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)
  • Ken Garrett on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)
  • Bimasha@123 on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in