I am kind of confused why the cost per factory hour for both product A and B are the same? Since they are different so should they be costing differently per each factory hour?

Great lectures. May i ask you about example 1 and 2 on the fixed cost section. To calculate fixed cost you’re using A: 20,000 units; B: 10,000 units. Why are we using the max demand unit instead of optimum production plan unit? I am thinking we could use this number for example 1 are 19,000 and 10,000 units; example 2 are 20,000 and 8,000 units. Thank you.

The budgets will have been prepared before knowing about the limit on production. Therefore the overheads will have been absorbed assuming the produced to meet the full demand. Even though the actual production ends up being less, the total overheads will, of course, remain the same.

salbijoy says

Thank you so much.

John Moffat says

You are welcome 馃檪

jshryansh says

Dear Sir ,’

Bottleneck Resource is not in this lecture,Where I found About Bottleneck resource ?

John Moffat says

In the free lecture notes that you should be using with the lectures.

haluong0107 says

Dear Sir,

I am kind of confused why the cost per factory hour for both product A and B are the same? Since they are different so should they be costing differently per each factory hour?

Appreciate your help and nice day!

John Moffat says

They are both made in the same factory, and the costs are charged according to how many hours each unit spends in the factory.

svetlanawool says

Thank you! Thank you so much for your great help. Kind regards, Svetlana

John Moffat says

You are welcome 馃檪

loukasierides says

Dear Sir,

thank you for another great lecture, i am enjoying F5 very much. I recently did F7 and F9.

thank you for making throughput so easy to understand.

John Moffat says

Thank you for your comment 馃檪

gracetan85 says

Hi Sir John,

Great lectures. May i ask you about example 1 and 2 on the fixed cost section. To calculate fixed cost you’re using A: 20,000 units; B: 10,000 units. Why are we using the max demand unit instead of optimum production plan unit? I am thinking we could use this number for example 1 are 19,000 and 10,000 units; example 2 are 20,000 and 8,000 units.

Thank you.

John Moffat says

I do actually explain this in the lecture.

The budgets will have been prepared before knowing about the limit on production. Therefore the overheads will have been absorbed assuming the produced to meet the full demand. Even though the actual production ends up being less, the total overheads will, of course, remain the same.

gracetan85 says

Hi Sir John, apologizes for repeating question. I just re-watch your lectures and notice what you have explained. Thank you so much for replying.

John Moffat says

You are welcome 馃檪

addisanopacourage says

Hi John, thank you for the lecture.

John Moffat says

You are welcome 馃檪