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Emmanuel Mashaya says
August 7, 2020 at 11:22 am
Hi there John , i appreciate your work so much
I am here to point out an error , i think in the lecture notes for Example 2 answers on Throughput Accounting
Units produced for Product B are supposed to be 8000 units not 10000 as depicted within the answers to the exercise
John Moffat says
August 7, 2020 at 4:20 pm
No – the answer is correct.
I guess that you are referring to the calculation of the total fixed costs. They are calculated on the budgeted demand. I explain the reasons for this in the lecture.
May 19, 2020 at 9:35 am
can any body please tell me how to solve this question
A manufacturing co decides which three mutually exclusive products to make in its factory on the basis of maximising the companies throughput Accounting ratio
current data for the products is shown in the table
Product X prod y Prod Z
selling price p u 60 40 20
direct material cost PU 40 10 60
Machine HRS pu 10 20 2.5
total Factory cost ( excluding dir materials are $150000 The company cannot make enough of any product to satisfy the external demand entirely as machine Hrs are restricted
wht is the objective of this question and how should i solve it
May 19, 2020 at 11:34 am
You must ask this kind of question in the Ask the Tutor Forum and not as a comment on a lecture.
March 27, 2020 at 10:41 am
Hello John sir,
How are you?
I hope you are great,
First of all thank you for your explanation and your appreciated time, I have a question its mainly related to throughput CM. And concerned to fixed manufacturing costs under throughput CM all manufacturing costs except direct material all consider as fixed costs and you have explained the reason for being DL as fixed but in case of other variable costs like electricity, water and maintenance for example what is the reason for being as fixed costs under throughput CM.
Thank you in advance.
March 27, 2020 at 2:32 pm
You are correct in saying that in practice some costs might well remain variable – it is not an ‘exact science’.
However, for the exam there is no argument – it is only materials that you consider as being variable.
March 27, 2020 at 9:13 pm
Thank you sir thank you so much.
March 28, 2020 at 9:35 am
You are welcome 🙂
March 27, 2020 at 10:38 am
Hello John sir,
How are you?
I hope you are great,
First of all thank you for your explanation and your appreciated time, I have a question its mainly related to throughput CM. And concerned to all manufacturing costs except direct material all consider as fixed costs and you have done the reason for being DL as fixed but in case of other variable costs like electricity, water and maintenance for example what is the reason for being as fixed costs under throughput CM.
Thank you in advance.
January 30, 2020 at 7:25 pm
Hi John. Could you explain why when calculating profit using optimal production (20k units of A and 8k of B), we use fixed cost multiplied by 20k units of A and 10k units of B (and not 8k units)
January 30, 2020 at 10:36 pm
I do explain this in the lecture! It is because the budget will have been prepared using the budgeted production. Even though the actual production is different, the total fixed costs will not change by definition (the total is fixed whatever happens).
June 21, 2020 at 12:02 am
Ooh ok thank you
June 21, 2020 at 8:51 am
January 9, 2020 at 9:50 pm
I’m sitting my PM exam in March 2020 and your lectures are awesome!
Quick question, the lecture and notes state the Throughput Accounting Ratio is worked out by dividing by return or cost by the factory hours, just to clarify does this change depending on what the bottle neck resource is?
January 10, 2020 at 8:48 am
We calculate the return per hour based on the time in the bottleneck resource.
November 30, 2019 at 3:37 pm
I don’t see any written solution/lecture video for Example 3 on Bottleneck Resource. Could you please let me know where solutions are provided?
November 30, 2019 at 3:49 pm
Look at the contents page of the lecture notes and you will see that solutions are provided to all examples 🙂
November 30, 2019 at 3:58 pm
October 9, 2019 at 12:02 pm
Please tell me where is the solution of Example 3. Thanks in advance
September 10, 2019 at 10:14 am
Thank you for the well explained notes and lectures.
By any chance are you going to do a lecture video on example 3 of the bottleneck resources?
September 10, 2019 at 10:19 am
Thank you for your comment.
I will record a video when I have the time, but until then there is a printed answer in the free lecture notes.
September 10, 2019 at 6:26 pm
Thank you very much found them.
September 11, 2019 at 6:21 am
November 24, 2019 at 10:43 am
Hello, can I check where did you find them?
November 24, 2019 at 11:07 am
Try looking at the contents page 🙂
August 16, 2019 at 4:27 pm
Good evening sir,
I have found out that I can draw a conclusion in solving the throughput and key factor analysis.
Step 1, Contribution/u or Throughput and then contribution/u/h or Return blablabla, so that I can judge which is the better/best option
Step 2, considering how many units of each product should be produced, and then the total contribution
Step 3, Work out and eliminate Fixed or “Fixed” costs, then the best profit
I suggest that your lecture is really helpful, really appreciate it!!!!????
BTW, Looking forward to the ‘bottleneck section’ since I have to check my answer.
Have a good weekend, sir
Lancelot Wang Xue-Ran from China
July 27, 2019 at 4:33 pm
Thank you for this well made lecture!
I was able to understand all the details regarding throughput accounting and Key factor Analysis.
I now only hope that you would also take some of your free time to make a lecture on Bottleneck resource to explain how u would approach the Example question given.
(A short 3-4 mins video would suffice, in which you run over how to do the example).
Thank you yet again for your generous work.
Darin P. Stephen
July 27, 2019 at 8:03 pm
I will record a lecture when I have the time. However, I guess you realise that there is an answer in the lecture notes? 🙂
June 23, 2019 at 8:19 pm
I was going through an MCQ question on Throughput Account and came across a question, it was on the Through Put Accounting Ratio.
I wanted to calculate the total factory cost and came across an admin cost.
I Added the Labour cost, Fixed cost and the Admin cost and discovered later that the Admin cost is not supposed to be added tot he total factory cost.
I just wanted to confirm that admin cost should not be added to total factory cost.
June 24, 2019 at 8:05 am
Correct. It is only the costs in the factory – i.e. the production costs.
August 16, 2019 at 4:38 pm
Those like admin. costs and distribution costs are non-production costs personally suggest~
May 20, 2019 at 4:59 pm
Excellent lecture .
May 20, 2019 at 5:58 pm
Thank you for your comment 🙂
January 6, 2019 at 9:00 am
On the lecture notes in Chapter 5 there is a point called Bottleneck Resources, i see this was not discussed or mentioned at all in the lectures. how important is this for the exam?
January 6, 2019 at 10:21 am
It is relevant for the exam. There is no lecture at the moment, but the notes together with the example (and answer) should be clear enough.
November 25, 2018 at 10:03 am
Hi dear john,
I’v watched your lecture completely and i got all of the topics and cases except the last calculation in your last lecture in throughput accounting
It says the ratio should be more than 1
But i couldnt understand its logic
If it was selling price per u divided by cost per u I could see the logic because selling price covers the costs and its 1 or more than 1 and its ok
But here is profit on costs and it says it should be more than one to cover the costs
I assumed that if the profit or return per hour is 0.5 and cost per hour hour is 2
Answer will be less than 1 but its ok
Because its profit/return and no selling price…
I think i misunderstood a part because it doesnt match with your lecture
I’ll be thankful if you help me in this way:)
November 27, 2018 at 4:52 pm
But the throughput return is certainly not the profit – it is the selling price less the materials cost. This is the whole point of throughput accounting. The selling price less the materials cost needs to be more than the other costs (which are all assumed to be fixed under throughput accounting) for there to be a profit – so the TAPR needs to be more than 1.
I do suggest that you watch the lectures again 🙂
December 3, 2018 at 11:18 pm
Thanks dear john,I got the point
December 4, 2018 at 6:47 am
June 24, 2020 at 3:10 pm
Thank you sir, you are my hero
June 24, 2020 at 4:33 pm
October 4, 2018 at 12:43 pm
Will there be a bottleneck resource lecture video?
I see an Example 3, however no video to go with it?
I look forward to your reply 🙂
October 4, 2018 at 4:29 pm
Maybe one day – when I have the time 🙂
However the example in the notes (together with the answer in the notes) should make it clear.
If not then ask in the Ask the Tutor Forum.
October 3, 2018 at 10:21 am
Thanks John. If I may ask, what’s the best course of action for products with TPAR <1? What are some of the challenges of using this approach. How can we make decisions in a TPA environment?
September 25, 2018 at 12:37 pm
Is there going to be a lecture on this ?
September 25, 2018 at 12:32 pm
There is no lecture on bottleneck resource but it is there in the notes complete with an example. Is it not part of the syllabus anymore ?
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