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Hi,
Please can you help me – Im doing a question from 2013 Kaplan interim assessment no2. It is a multi-product throughput question.(Merta Ltd).
Mixing hours is a constraint on production with only 5000 hours available in the quarter.To find throughtput it requires ‘cost per mixing hour’ as part of the calcs – for the numerator to find Total Factory costs it adds total ANNUAL overhead cost to the quarterly labour costs (5000 mixing hours @10 each) and divides this by the total mixing hours available (5000 <the available hours for quarter again)
My question is why do we use annual fixed overheads and only quarterly figures for labour / total bottleneck resource.
Why not divide the fixed overhead cost by 4 before adding it to labour cost in quarter.Please can you help – There are a number of us stuck on this point & we’ve looked everywhere for the answer!!
Kind RegardsI have watched but I think Ive missed why the annual costs are used because in that example its fixed cost per unit rather than an annual total.
Sorry if im being dumb – Im totally foxed!! 🙂
In the question I have for Merta, the other fixed overheads are given as $224,000 per quarter (not per year) and they have used this correctly in the answer. Maybe you have a different version, but certainly in the copy that I have they give the fixed overheads per quarter (not the annual fixed overheads).
Thank you loads for your help – looks like it is a printing error.
Please can you tell me where I might obtain your version of the MERTA ltd question / model answer?Kind Regards
Hi sir, i tried looking up for the answer online but I can’t find it. somehow I am getting a TPAR of <1 and when doing the optimum qties the amounts added together are less than the factory costs resulting in a loss – can you suggest things I can check?
But if you have paid Kaplan for the question then you must also have the answer.
Ask me which part of the answer you are not clear about and I will try and help, but please don’t expect me to provide you with a full model answer.
My question is not on this topic please. sometime ago you recommend some management accounting text books. i try to remember the names but i couldn’t. i don’t know the are on this site where i can locate it. Kindly detail me about the book.
In future please start a new thread when it is a new topic – this obviously has nothing to do with Throughput Accounting.
I have never recommended a management accounting text book.
We have our own free Lecture Notes on this website which are to be used with our free Lectures.
If you want a Study Text as well then you should buy one from one of the ACCA approved publishers.
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