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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Throughput accounting ratio
Bpp revision kit says: reducing the machine time per unit will increase throughput per hour and factory cost per hour by the same proportion leaving the TA ratio unchanged. Could you please explain in more details.
I know that the BPP Revision Kit says that, but it is not true 🙂
Reducing the machine time per unit will increase the TA ratio (it increases the return per factory hour, but does not affect the cost per factory hour).
Thanks?
You are welcome 🙂