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Throughput accounting

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Throughput accounting

  • This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • November 24, 2018 at 9:15 pm #485856
    cinaa2
    Participant
    • Topics: 4
    • Replies: 2
    • ☆

    Hi sir
    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 25, 2018 at 10:00 am #485907
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54664
    • ☆☆☆☆☆

    The throughput return is the selling price per unit less the material cost per unit (which is not the profit). This has to be more than the other costs (which are assumed to be fixed), if there is to be a profit.

    November 25, 2018 at 1:02 pm #485933
    cinaa2
    Participant
    • Topics: 4
    • Replies: 2
    • ☆

    Useful,Thanks dear john

    November 25, 2018 at 4:31 pm #485950
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54664
    • ☆☆☆☆☆

    You are welcome 🙂

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