Throughput accounting – Key Factor Analysis – ACCA Performance Management (PM)
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Hi John,
So I don’t get the part where the fixed cost of each unit is multiplied by the demand in getting the TFC. I’m wondering why. Because that seems to make it vary as and when demand units changes. Can you please throw more light on that?
It is multiplied by the budgeted demand because that is what will have been used when calculating the absorption rate. That total is the budgeted fixed overheads and that total will be the same whatever the actual production is.
Are these lectures up to date for 2024?
for the profit part, can we just take $2 and multiply it by the number of units produced ?
Hi John,
thank you again for the lectures, very useful!
When you say “In a situation where we are manufacturing several products, all of which use the same limited
resource, then we need to decide on how best to use the limited resource in production.” how best, meaning maximising profit?
Yes, maximising profit 馃檪
Hello Sir,
The solution in the free notes for example 2 is different there they have taken only material cost as the variable cost and other cost i.e. labour & other variable costs as fixed cost. Is it because they have mentioned in the question that “in the short-term only material costs are variable”? Is the solution behind the notes for example 2 wrong??
okay got it i was seeing example 2 and you were explaining example 1. Lol sorry
loved the lecture i had so many doubts (very basic but were annoying )
Thank you Sir..God bless you and Team Opentuition
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