Question 1

**Section A**

SolarTech manufactures solar panels. The factory has a total operating cost of $120,000 per week and operates for 4,000 hours per week. 
Product X has a selling price of $150 and direct material costs of $70. It takes 2 hours of factory time to produce one unit of Product X.

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

Accepted Answer

1. Calculate Return per factory hour: (Selling Price - Material Cost) / Time per unit.
2. Calculate Cost per factory hour: Total factory costs / Total factory hours.
3. TPAR = Return per factory hour / Cost per factory hour.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Forgetting to divide the throughput per unit by the time taken to get return per hour.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA PM — Performance Management Practice Exam 6

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