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ACCA F5 Throughput Accounting

VIVA

Reader Interactions

Comments

  1. lwandilenelly says

    April 22, 2018 at 2:34 pm

    Hi John,
    Is there a worked solution for Example 3 [Bottleneck Resource]?

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    • John Moffat says

      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.

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  2. aaesha says

    February 27, 2018 at 4:35 pm

    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.

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    • John Moffat says

      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.

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  3. mandeq says

    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.

    Many thanks

    Najma

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    • John Moffat says

      February 8, 2018 at 8:24 am

      You can find them linked from the main F5 page.
      https://opentuition.com/acca/f5/

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  4. sind says

    December 11, 2017 at 2:17 pm

    don’t you have lectures on breakeven…

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    • John Moffat says

      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!!!

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      • sind says

        December 13, 2017 at 2:46 am

        Thank you so much! 馃檪

      • John Moffat says

        December 13, 2017 at 6:30 am

        You are welcome 馃檪

  5. monakayedpour1 says

    November 21, 2017 at 12:25 pm

    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

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    • John Moffat says

      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).

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      • monakayedpour1 says

        November 22, 2017 at 8:08 pm

        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

      • John Moffat says

        November 23, 2017 at 8:47 am

        Have you looked at the contents page? 馃檪

        (The answer is on page 91)

  6. barre44 says

    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

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    • John Moffat says

      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.

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  7. barre44 says

    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?

    Thank you

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    • John Moffat says

      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.

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  8. barre44 says

    October 27, 2017 at 3:26 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

    Log in to Reply
  9. denis0308 says

    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?

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    • John Moffat says

      October 16, 2017 at 3:15 pm

      No I didn’t – but all that is needed is explained in the lecture notes 馃檪

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  10. charuvinodvp says

    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”.

    Regards,
    Charu

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    • John Moffat says

      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.

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      • charuvinodvp says

        September 10, 2017 at 2:15 pm

        Thank you, Sir!

      • John Moffat says

        September 10, 2017 at 3:25 pm

        You are welcome 馃檪

  11. maheshaprabhu says

    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?

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    • John Moffat says

      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.

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  12. nitint says

    August 11, 2017 at 1:03 pm

    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

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    • John Moffat says

      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.

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  13. lileko92 says

    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

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    • John Moffat says

      August 5, 2017 at 5:10 pm

      Thank you very much for the comment 馃檪

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  14. galina1964 says

    August 1, 2017 at 8:11 pm

    Great!

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    • John Moffat says

      August 2, 2017 at 7:20 am

      Thank you 馃檪

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  15. jerickc says

    July 18, 2017 at 12:02 am

    One word to describe John: BRILLIANT

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    • John Moffat says

      July 18, 2017 at 7:50 am

      Thank you 馃檪

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  16. iyamu says

    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 .

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    • John Moffat says

      June 10, 2017 at 4:47 pm

      That is really the only difference (but an important one 馃檪 )

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  17. Shermaine says

    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!

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    • John Moffat says

      May 11, 2017 at 6:55 pm

      Thank you very much for your comment 馃檪

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  18. ambrula13 says

    May 4, 2017 at 10:07 pm

    Thank you so much for great lecture !

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    • John Moffat says

      May 5, 2017 at 5:56 am

      Thank you for the comment 馃檪

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  19. 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.

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    • John Moffat says

      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.

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      • Samuel Koroma says

        April 3, 2017 at 3:06 pm

        Okay John, noted and thanks for the clarification.

      • John Moffat says

        April 4, 2017 at 6:22 am

        You are welcome 馃檪

  20. nightskyastar says

    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)

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    • John Moffat says

      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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