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BPP Text book, question bank B-section question 20
The only confusion in the question is which fixed cost to use in the answer, I thought that FC given in question 1,470,000will be taken but in answer FC is used along with the Variable fixed cost + FC (1470000+3540000=5010000) which is corrected intimated in previous question 19.
It’s a bit confusing in question which FC to based on. Please advise on how to identify such trics?
BPP Textbook throughput chapter – Quiz Question no3
Question says labour is a constraint between three services I was thinking it’s a throughput question, but I think it’s not as in answer it is solved with contribution not throughput.My question is does throughput applies on services business? I think not but a bit of confused please advise accordingly.
I do not have the BPP Study Text – only the Revision Kit.
However with regard to your first question, with throughput accounting we regard all costs as being fixed apart from material costs. Therefore the total factory cost is the normal fixed costs together with all variable costs apart from materials. I do explain this in my free lectures on throughput accounting.
Throughput accounting can be used for service businesses (and has been in the exam). However we only take a throughput approach if the question specifies to take it. If not then it is normal contribution analysis.
I do suggest that you watch my free lectures. They are a complete free course for Paper PM and cover everything needed to be able to pass the exam well. If you are watching the lectures then you do not really need the Study Text.
However you choose to study, it is vital that you have a Revision Kit. It is full of past exam and other exam standard questions for practice, and practice is essential for passing the exam.
(Most of the questions in the Study Text are not really representative of the sort of questions asked in the exam.)
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