ACCA F5 Throughput Accounting
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Hi John,
Is there a worked solution for Example 3 [Bottleneck Resource]?
Not as a lecture, but as with all the examples there is an answer in the lecture notes.
Dear John,
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.
To find out how many metres could be produced we need to divide the factory hours by the time per metre.
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.
Many thanks
Najma
You can find them linked from the main F5 page.
https://opentuition.com/acca/f5/
don’t you have lectures on breakeven…
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!!!
Thank you so much! 馃檪
You are welcome 馃檪
Hi There,
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
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).
Hello,
thank you for your prompt response.
I looked for the answers but i cannot find them in the lecture notes! Could you please advise?
Much appreciated
Have you looked at the contents page? 馃檪
(The answer is on page 91)
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
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.
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?
Thank you
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.
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
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?
No I didn’t – but all that is needed is explained in the lecture notes 馃檪
Thank you for the great Lecture!
Please let me know if we have a lecture on “Bottleneck Resource”.
Regards,
Charu
Thanks for the comment.
There isn’t really anything to add on the bottleneck resource other than what is in the lecture notes.
Thank you, Sir!
You are welcome 馃檪
Hi, I need your advice.
Why we take the budgeted production when calculating the Production cost in throughput accounting why not actual production?
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.
Hi John,
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.
Regards,
Nitin
You must ask this sort of question in the Ask the Tutor Forum and not as a comment on a lecture.
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
Thank you very much for the comment 馃檪
Great!
Thank you 馃檪
One word to describe John: BRILLIANT
Thank you 馃檪
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 .
That is really the only difference (but an important one 馃檪 )
I cannot begin to thank you enough for so clearly presenting this topic. Keep up the excellent work!
Thank you very much for your comment 馃檪
Thank you so much for great lecture !
Thank you for the comment 馃檪
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.
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.
Okay John, noted and thanks for the clarification.
You are welcome 馃檪
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)
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!!