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July 18, 2018 at 10:41 am
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
July 18, 2018 at 3:35 pm
They are both made in the same factory, and the costs are charged according to how many hours each unit spends in the factory.
July 10, 2018 at 9:08 pm
Thank you! Thank you so much for your great help. Kind regards, Svetlana
July 11, 2018 at 7:04 am
You are welcome 🙂
June 12, 2018 at 7:30 pm
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.
June 13, 2018 at 8:19 am
Thank you for your comment 🙂
May 19, 2018 at 4:37 am
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.
May 19, 2018 at 9:14 am
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.
May 21, 2018 at 1:50 pm
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.
May 21, 2018 at 3:35 pm
April 23, 2018 at 7:42 pm
Hi John, thank you for the lecture.
April 24, 2018 at 7:15 am
April 22, 2018 at 2:34 pm
Hi John, Is there a worked solution for Example 3 [Bottleneck Resource]?
April 22, 2018 at 5:34 pm
Not as a lecture, but as with all the examples there is an answer in the lecture notes.
February 27, 2018 at 4:35 pm
For the bottleneck example, we multiple the processing time per metre in hoursefor each processes with the factory operates hours, right?
When I try to do it for the stretching (Product A) for example it supposed to be 562,500 whereas the answers shows the opposite. Could you please clarify.
February 28, 2018 at 9:09 am
To find out how many metres could be produced we need to divide the factory hours by the time per metre.
February 7, 2018 at 2:55 pm
Good evening everybody. I can’t find online practice tests. Can anyone locate it to me. I want to assess my understanding of topics by doing these online tests.
February 8, 2018 at 8:24 am
You can find them linked from the main F5 page. https://opentuition.com/acca/f5/
December 11, 2017 at 2:17 pm
don’t you have lectures on breakeven…
December 12, 2017 at 8:02 am
Of course we do – the lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.
Try Cost, Volume,Profit analysis!!!
December 13, 2017 at 2:46 am
Thank you so much! 🙂
December 13, 2017 at 6:30 am
November 21, 2017 at 12:25 pm
Thank you for the videos.
However, I have noticed the example 3 (Bottleneck Resource) in chapter 5 is not covered in the videos!
Is there any chance if we can have a video on example 3?
Thank you Mona
November 21, 2017 at 1:18 pm
No – maybe I will record one when I have the time. However it should be clear enough (and, of course, there is an answer to the example in the lecture notes).
November 22, 2017 at 8:08 pm
thank you for your prompt response.
I looked for the answers but i cannot find them in the lecture notes! Could you please advise?
November 23, 2017 at 8:47 am
Have you looked at the contents page? 🙂
(The answer is on page 91)
October 28, 2017 at 7:35 pm
Thank you John for your excellence presentation.
In real world which method is preferable to use a key factor analysis or a Throughput Account, because in this example the two method are giving totally different options for production decisions and ranking.
Thank you again
October 29, 2017 at 8:16 am
It depends on the nature of the business and the way its costs are structured, particularly the extent to which its labour costs are fixed or variable.
October 27, 2017 at 4:28 pm
another Question if you don’t mind.
They said the TA ratio should be greater than 1 if a product is to be viable. Does this mean if its less than 1 it will not be accepted even if its in a positive position; say like 0.8?
October 28, 2017 at 9:49 am
No, and that is not what I say in my lecture. The product may still be viable, but the company should still look for ways of trying to get the TA ratio more than 1.
October 27, 2017 at 3:26 pm
October 16, 2017 at 12:54 pm
Dear John, Please correct me if I am wrong, but it seems you did not say a word about section 5. Bottleneck Resource, did you?
October 16, 2017 at 3:15 pm
No I didn’t – but all that is needed is explained in the lecture notes 🙂
September 10, 2017 at 4:36 am
Thank you for the great Lecture!
Please let me know if we have a lecture on “Bottleneck Resource”.
September 10, 2017 at 11:09 am
Thanks for the comment.
There isn’t really anything to add on the bottleneck resource other than what is in the lecture notes.
September 10, 2017 at 2:15 pm
Thank you, Sir!
September 10, 2017 at 3:25 pm
September 5, 2017 at 7:31 am
Hi, I need your advice. Why we take the budgeted production when calculating the Production cost in throughput accounting why not actual production?
September 5, 2017 at 7:44 am
I do explain this in the lecture!!!
This only relates to the fixed overheads (which under throughput are everything apart from materials) and is because we assume that the budgets were prepared before knowing about the limited time, and therefore we assume that we budgeted on producing to meet demand and therefore absorbed the fixed overheads on this basis. By definition, the total fixed overheads will stay the same even though we end up producing less than budgeted.
August 11, 2017 at 1:03 pm
I am referring to Dec 14 F5 paper, question 2 in section B (Glam co.)
How should one understand in such a question whether the labour cost of all staff should be taken for factory cost calculation or just the bottleneck staff?
Thanks in advance.
August 11, 2017 at 4:59 pm
You must ask this sort of question in the Ask the Tutor Forum and not as a comment on a lecture.
August 5, 2017 at 12:10 pm
Sir you are really good…I am really understanding your lectures and am more motivated to study harder. I had difficulties at first until I started watching the lectures. Thank you Sir
August 5, 2017 at 5:10 pm
Thank you very much for the comment 🙂
August 1, 2017 at 8:11 pm
August 2, 2017 at 7:20 am
Thank you 🙂
July 18, 2017 at 12:02 am
One word to describe John: BRILLIANT
July 18, 2017 at 7:50 am
June 10, 2017 at 12:04 pm
Great lecture sir well done …. my question is though d lecture is very clear , i really did not see difference between throughput and contribution apart from the fact that material is the only significant variable cost. I hope i pass this paper f5 that lots of ppl have been crying over and running away from.This is will be my first attempt coming September .
June 10, 2017 at 4:47 pm
That is really the only difference (but an important one 🙂 )
May 11, 2017 at 6:42 pm
I cannot begin to thank you enough for so clearly presenting this topic. Keep up the excellent work!
May 11, 2017 at 6:55 pm
Thank you very much for your comment 🙂
May 4, 2017 at 10:07 pm
Thank you so much for great lecture !
May 5, 2017 at 5:56 am
Thank you for the comment 🙂
Samuel Koroma says
April 3, 2017 at 2:01 pm
Wow! A very good presentation. Thanks very much John. Based on the lecture, throughput is the same as contribution (fixed cost + profit or sales value-direct material cost). All costs in the factory is fixed except the direct cost of materials (variable). The total factory cost or operating expenses is the fixed production costs with an element of labour cost. Here, we also use throughput p.u. for each product to calculate the maximum or total throughput for the products and not the throughput p.u. of the limiting factor.
John is it advisable to rejects products with TPAR of less than one?
In calculating the TPAR for each product, is it also necessary to calculate the overall or average TPAR for the company and then measure each individual product TPAR against the overall or average TPAR?. Using Example 2
TPAR = $404,000/$360,000=1.12 OR
Return per hour = $404,000/48,000hrs=$8.42 Cost per hour = $360,000/48,000hrs=$7.50 TPAR = $8.42/$7.50 = 1.12
Product A TPAR is above the average/overall ratio.
April 3, 2017 at 2:39 pm
No – we would not reject projects with a TPAR less than 1 because they are still generating throughput. However, preference is always given to projects with the highest TPAR’s and we would always be looking for ways of increasing the TPAR’s.
There is no merit in calculating an average TPAR.
April 3, 2017 at 3:06 pm
Okay John, noted and thanks for the clarification.
April 4, 2017 at 6:22 am
February 28, 2017 at 3:28 pm
Good evening Mr. John, in example 2, when calculating “maximum throughput”, A: 2.000 units X $17 B: 8.000 units X $8 But in textbook, when calculating maximum throughput, textbook uses “total machine hours” instead of “units”……. For example, in this case, A: 40.000 hours X $17 B: 8.000 hours X $8 ? Could you explain why textbook uses total hours instrad of units? I thought I only use units according to your lecture.. (BPP reading textbook throughput example 3.1)
February 28, 2017 at 4:29 pm
You can use hours at throughput per hour, or you can use units at throughput per unit – both will give exactly the same answer.
To take hours at throughput per unit would make absolutely no sense at all!!
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