Thanks john for these amazing questions. I hope you record a lecture about bottle neck resource but I’m okay with it as I understood the full concept by carefully going through your notes.

in question 1 we can calculate the throughput either by using through put per unit or through put per factory hour right and in this question both the options are available.

Regarding Q3: You have ranked product X based on higher contribution i.e. 120 vs 104, Am I right? Although, the TPAR of X should be 6 and Y be 6.9. (if we assume there is no other fixed cost)

I have no idea how you are getting the TPAR’s of 6 and 6.9. In both cases you would divide the throughput contribution per hour by the factory cost per hour, which we don’t know but would be the same for both products (since they are made in the same factory). Therefore automatically the product with the highest throughput contribution per hour will always also have the highest TPAR.

Did you watch the free lectures on this before attempting the test?

Labour Cost per unit is already included i.e $10 (as fixed cost) then again, it says ” Labor budget is 10000 hours @ cost of $5/Hour? why is the contradiction. Please help me understand.

Hi, I just want understand why in previous example we used to calculate the return per factory hour as 45/0.2 =$225 and in this example 40/(20/60) =$120 Thank you in advance for response

What about the definition of bottleneck resource. I mean in revision kit there are some exercises that include bottleneck but i didn’t find anything about it in Chapter 5 lectures nor in examples.

When a product is worked on on one machine, then passes to a second machine and so on, then the bottleneck resource is the slowest machine – the one that is limiting how many units can be produced per hour.

Thanks for the quiz and its helpful. In addition, this is my first time venturing into ACCA. Please how do i get the study kit? Do you have it? Thanks once again

We do not sell books – we have our free lectures and free lecture notes (which are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well).

The book you need is a Revision Kit and you should buy one from one of the ACCA approved publishers. (If you choose to buy it from BPP then you get a special 20% discount if you click on the link that appears on most of our pages)

It is essential that you buy a Revision Kit from one of the ACCA approved publishers – they contain lots of exam standard questions to practice, and practice is vital if you are to pass the exam.

these questions are far more easier than the real one ! can not comply with the difficulty of real one after this. so, could you make the level of difficulty of these test quesions close to that of exam?

These are not meant to be as hard as the real exam – they are simply quick tests to check you have understood the lectures for each chapter, and they will not be made harder.

We do have an online mock exam which is made up of exam-standard questions.

However, as stated throughout this website, you cannot possibly hope to pass the exam without buying a Revision Kit from one of the ACCA approved publishers – they are full of exam standard questions.

Hello, I have trouble understanding when to use direct labor in calculation (in Q3, 20 for X, 15 for Y)? In answer you say that you are calculating throughput contribution, but isn’t contribution SP-VC ? There is no highlight that only mat.cost are variable here, and labor fixed.

At the moment the questions appear in a random order (which I am going to correct). But it means that any of the questions could have appeared for you as question 2.

You are going to have to tell me a bit more about the question and then I know which one that you are asking about.

But why do the total costs include 100,000x$5. According to the question: 0.2h machine hours are required per unit and 5,000h machine hours, thus there is only the possibility to produce 5,000units. For 1 unit I have $10 labour costs, which mean 2h per unit. If I can only produce 25,000units due to bottleneck of 5,000machine hours, why isn’t it then (2h*25,000units*5$=$250,000) instead of $500,000. Thx

But if we calculating the ta ratio for this product why do u need to add the hours for the other products. Even I calculate the ta ratio excluding the 100000 hours

Throughput accounting is only of any relevance when there are several products being produced. The TPAR is comparing the return per hour from each of the products with the total factor cost per hour – not the cost for each product separately. Have you watched my free lectures on this?

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urmilsanghavi says

got 80% , thanks for the amazing questions , i was little confused about last question, from option (b) and (c)

Chau says

same to me

mohamed2000 says

Thanks john for these amazing questions. I hope you record a lecture about bottle neck resource but I’m okay with it as I understood the full concept by carefully going through your notes.

John Moffat says

I will record a lecture when I have the time. However do note that there is a printed answer to the example at the end of the notes.

jonahex1 says

requesting for a lecture about bottlenecks to be added in chapter5

John Moffat says

See below.

tamunotonye says

There is no lecture for bottleneck resources. Please can this be made available. I really appreciate the lectures. Thanks a lot.

John Moffat says

I will record a lecture when I have the time.

However the answer to the example is in the notes and should make sense.

sequeira says

in question 1 we can calculate the throughput either by using through put per unit or through put per factory hour right and in this question both the options are available.

John Moffat says

No. The throughput account ratio (which is what this question asks for) is always the throughput return per hour divided by the factory cost per hour.

Did you watch the free lectures on this before attempting the test?

chamion says

hi, when calculating return per factory hour, i’m getting my answer as 2.1 as opposed to your 210. please explain

John Moffat says

The return is $21 in 6 minutes.

There are 60 minutes in one hour.

Therefore the return per hour is 60/6 x $21

tanweerhassan says

Regarding Q3: You have ranked product X based on higher contribution i.e. 120 vs 104, Am I right?

Although, the TPAR of X should be 6 and Y be 6.9. (if we assume there is no other fixed cost)

need guidence sir

John Moffat says

I have no idea how you are getting the TPAR’s of 6 and 6.9.

In both cases you would divide the throughput contribution per hour by the factory cost per hour, which we don’t know but would be the same for both products (since they are made in the same factory). Therefore automatically the product with the highest throughput contribution per hour will always also have the highest TPAR.

Did you watch the free lectures on this before attempting the test?

tanweerhassan says

Labour Cost per unit is already included i.e $10 (as fixed cost) then again, it says ” Labor budget is 10000 hours @ cost of $5/Hour? why is the contradiction. Please help me understand.

tanweerhassan says

I meant Q2 sir

John Moffat says

Each unit must take 2 hours of labour. 2 hours x $5 per hour = $10 per unit

nataliq says

Hi,

I just want understand why in previous example we used to calculate the return per factory hour as 45/0.2 =$225 and in this example 40/(20/60) =$120

Thank you in advance for response

John Moffat says

Question 2 says that each unit takes 0.2 hours.

Question 3 says that each unit takes 20 minutes. There are 60 minutes in a hour, so 20 minutes is 20/60 hours (which is 0.33333 hours).

yavela92 says

Dear John,

What about the definition of bottleneck resource. I mean in revision kit there are some exercises that include bottleneck but i didn’t find anything about it in Chapter 5 lectures nor in examples.

John Moffat says

When a product is worked on on one machine, then passes to a second machine and so on, then the bottleneck resource is the slowest machine – the one that is limiting how many units can be produced per hour.

I must add it to the lecture 馃檪

teewhy11 says

Thanks for the quiz and its helpful. In addition, this is my first time venturing into ACCA. Please how do i get the study kit? Do you have it? Thanks once again

John Moffat says

We do not sell books – we have our free lectures and free lecture notes (which are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well).

The book you need is a Revision Kit and you should buy one from one of the ACCA approved publishers. (If you choose to buy it from BPP then you get a special 20% discount if you click on the link that appears on most of our pages)

wwong says

We’re can I get more questions to practice? Please

John Moffat says

It is essential that you buy a Revision Kit from one of the ACCA approved publishers – they contain lots of exam standard questions to practice, and practice is vital if you are to pass the exam.

righan says

these questions are far more easier than the real one ! can not comply with the difficulty of real one after this. so, could you make the level of difficulty of these test quesions close to that of exam?

John Moffat says

These are not meant to be as hard as the real exam – they are simply quick tests to check you have understood the lectures for each chapter, and they will not be made harder.

We do have an online mock exam which is made up of exam-standard questions.

However, as stated throughout this website, you cannot possibly hope to pass the exam without buying a Revision Kit from one of the ACCA approved publishers – they are full of exam standard questions.

rosemariya says

how do you get the 60 that is you use (50-10)/(20/60)… how do u get that particular 60 ?

rosemariya says

for question 3

John Moffat says

It is to convert the minutes into hour – there are 60 minutes in an hour.

Natalya says

Hello, John!

Regarding your last reply from March 4th:

Why do we use other product’s costs to calculate TAR for this product?

John Moffat says

We don’t, and I haven’t used them in my reply!!

Have you watched the free lectures on throughput accounting?

umair1994 says

None of the quiz is appearing what can I do 馃檨 ?

opentuition_team says

try another device/ or browser

kevin says

THANKS FOR YOUR HELP,AM NOW THROUGH WITH THROUGHPUT ACCOUNTING.

John Moffat says

You are welcome (but please do not use capital letters) 馃檪

rscjo says

Im sorry I did not say which question – question 1.

rscjo says

Hi John, in one of the answer options throughput appears to be misspelt. Thank you for the questions though, they were very helpful.

John Moffat says

Thanks for that – I will have it corrected 馃檪

Samuel Koroma says

Thanks for the questions. They are very helpful

John Moffat says

I am pleased that you find them helpful 馃檪

veverica1983 says

Hello,

I have trouble understanding when to use direct labor in calculation (in Q3, 20 for X, 15 for Y)?

In answer you say that you are calculating throughput contribution, but isn’t contribution SP-VC ?

There is no highlight that only mat.cost are variable here, and labor fixed.

Thank you in advance,

John Moffat says

You need to watch the free lectures on throughput accounting! (There is no point in doing the tests without watching the lectures first.

In throughput accounting we assume that in the short-term all costs are fixed apart from materials.

veverica1983 says

Thank you.

John Moffat says

You are welcome 馃檪

alma says

sir can you please tell me how do i solve Q4 ?

Because i couldn’t get the right answer

i got 140

John Moffat says

The throughput is 30 – 9 = 21 per unit

The time for each unit is 6 minutes, which is 6/60 or 0.1 hours.

Therefore the return per factory hour = 21 / 0.2 = $210

jasmine says

How i solve the question 2?

John Moffat says

At the moment the questions appear in a random order (which I am going to correct).

But it means that any of the questions could have appeared for you as question 2.

You are going to have to tell me a bit more about the question and then I know which one that you are asking about.

Sydney says

how do l solve number 1 above? am getting 300 units. thus the question requiring the number of Y units to be produced

John Moffat says

The return per factory hour for X = (50 – 10) / (20/60) = $120

The return per factory hour for Y = (32 – 6) / (15/60) = $104

Therefore they will prefer to produce X.

The most they can produce of X is 1500 units, which takes 1500 x 20/60 = 500 hours

This leaves 100 hours which they will use to produce Y. Each Y takes 15/60 hours, so they will produce 100 / (15/60) = 400 units of Y.

jennyparker says

Sir, I calculated this question in minutes as oppose to hours I’m guessing this doesn’t matter?

John Moffat says

No it doesn’t matter – in the exam nobody will look at your workings anyway 馃檪

All that matters is that you choose the right answer!

sundardushy says

Thanks for your help.

Regards

Dushyanth

John Moffat says

You are welcome 馃檪

Irene says

Hi john, how to solve this question?

Irene says

I meant the question with TAR calculation required.

John Moffat says

The throughput is 60 – 15 = $45 per unit

The return per factory hour = 45 / 0.2 = $225

The total of the other costs is 250,000 + (100,000 x 5) = 750,000.

The factory costs per hour = 750,000 / 5,000 = $150

The TAR = 225 / 150 = 1.50

thomas84 says

But why do the total costs include 100,000x$5. According to the question: 0.2h machine hours are required per unit and 5,000h machine hours, thus there is only the possibility to produce 5,000units. For 1 unit I have $10 labour costs, which mean 2h per unit. If I can only produce 25,000units due to bottleneck of 5,000machine hours, why isn’t it then (2h*25,000units*5$=$250,000) instead of $500,000.

Thx

John Moffat says

But what about all the other products that we do not know about?!! 馃檪

This is only one of several products.

preetierc says

But if we calculating the ta ratio for this product why do u need to add the hours for the other products. Even I calculate the ta ratio excluding the 100000 hours

John Moffat says

Throughput accounting is only of any relevance when there are several products being produced. The TPAR is comparing the return per hour from each of the products with the total factor cost per hour – not the cost for each product separately. Have you watched my free lectures on this?