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If we are asked to calculate throughput accounting ratio , can we just use the below simple formula
Throughput /total factory cost in producing the unit
It gives the same ratio
In the books normally they are dividing return per factory hour / cost per factory hour
This takes little more effort but result is the same
The result is not the same when there are several products and the time per unit for each product is different!!!
I suggest that you watch my free lectures on throughput accounting – the lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.
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