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throughput accounting

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

  • This topic has 8 replies, 4 voices, and was last updated 9 years ago by John Moffat.
Viewing 9 posts - 1 through 9 (of 9 total)
  • Author
    Posts
  • June 4, 2016 at 12:23 pm #319308
    Saimon
    Participant
    • Topics: 123
    • Replies: 55
    • ☆☆

    In Throughput accounting how should i rank a product or which way is the best approach for ranking from this two :

    1) throughput per bottleneck resource
    or
    2) throughput accounting ratio

    June 4, 2016 at 1:19 pm #319328
    Saimon
    Participant
    • Topics: 123
    • Replies: 55
    • ☆☆

    when there are different factory cost available for different product, then what would be the best approach for ranking the product

    1) throughput per bottleneck resource
    or
    2) throughput accounting ratio

    June 4, 2016 at 4:40 pm #319367
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    In a proper throughput accounting question then there cannot be different factory costs for different products – the whole point is that the products are sharing the same factory.

    Ranking according to the throughput return per bottleneck hour, and ranking according to the TAR will always be the same ranking.

    I do suggest that you watch my free lectures on throughput accounting.

    Our free lectures are a complete course for Paper F5 and cover everything needed to be able to pass the exam well.

    June 5, 2016 at 10:46 am #319564
    pratima25
    Participant
    • Topics: 0
    • Replies: 2
    • ☆

    Hello sir, ive got a question, given that process is expected to take 8 hours per day and can produce 1200 units per hour. Throughput per unit is 80 and cost per factory hour is 90000. How to calculate throughput accounting ratio please. Thank you

    June 5, 2016 at 1:15 pm #319607
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    Each unit takes 1/1200 hours.

    Therefore the throughput return per hour = 80 / (1/1200) = $96,000.

    The cost per factory hour = $90,000.

    Therefore the TAR = 96,000 / 90,000 = 1.07

    June 5, 2016 at 3:18 pm #319628
    pratima25
    Participant
    • Topics: 0
    • Replies: 2
    • ☆

    Thank you very much

    June 6, 2016 at 7:44 am #319745
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    You are welcome 🙂

    June 6, 2016 at 12:35 pm #319848
    kasia
    Participant
    • Topics: 24
    • Replies: 17
    • ☆

    Dear John,

    I am sorry but I don’t understand where the $96000 came from?

    I’m getting 9.6 when performing your calculation

    June 6, 2016 at 4:29 pm #319897
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    Are you using a calculator?

    80 / (1/1200) = 80 x 1200 (multiplying top and bottom by 1200) = 96000

  • Author
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