Question 1

Section A

Artisan Bakes produces a specialty sourdough bread. The bottleneck resource is the fermentation room. 
Selling price per loaf: $8.00
Direct material cost per loaf: $2.00
Total factory costs (excluding materials) per day: $1,200
Time required in fermentation room per loaf: 0.5 hours
Total fermentation room hours available per day: 200 hours

Calculate the Throughput Accounting Ratio (TPAR) for the sourdough bread. (Enter your answer to two decimal places)

Accepted Answer

1. Calculate Throughput per unit (Selling Price - Material Cost). 2. Calculate Throughput per bottleneck hour. 3. Calculate Factory cost per bottleneck hour. 4. Divide Throughput per bottleneck hour by Factory cost per bottleneck hour.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Forgetting to divide the throughput per unit by the bottleneck time, or calculating factory cost per unit instead of per hour.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA PM — Performance Management Practice Exam 3

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