Question 1

Section A

SiliconForge manufactures semiconductor chips. The factory has a bottleneck process. The return per factory hour for Chip X is $450. The total factory costs (excluding direct materials) are $1,200,000 per month, and the bottleneck resource is available for 4,000 hours per month.

What is the Throughput Accounting Ratio (TPAR) for Chip X?

Accepted Answer

Calculate the cost per factory hour by dividing total factory costs by total bottleneck hours. Then divide the return per factory hour by the cost per factory hour.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Calculating the inverse ratio (Cost per hour / Return per hour).

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA PM — Performance Management Practice Exam 1

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