How Do You Answer Throughput Accounting Questions in ACCA PM?

Throughput accounting is a favourite ACCA PM topic built on the theory of constraints. It treats only direct materials as a variable cost and everything else as fixed 'operating expense', focusing on maximising throughput through the bottleneck resource. The marks come from the ratio calculations and the prioritisation decision — plus a clear understanding of the concept.

The key definitions

• Throughput = sales revenue − direct material cost.
• Throughput per bottleneck hour = throughput per unit ÷ the time each unit uses on the bottleneck resource.
• Throughput accounting ratio (TPAR) = throughput per bottleneck hour ÷ operating expense per bottleneck hour.

Making the decision

Prioritise products by throughput per bottleneck hour — the product that generates the most throughput per hour of the constraint is made first. A TPAR above 1 means a product earns more throughput than it costs in operating expense per bottleneck hour, so it's worth making; below 1 it isn't.

Common pitfalls

• Ranking by throughput per unit instead of per bottleneck hour.
• Treating labour as variable — in throughput accounting it's part of fixed operating expense.
• Forgetting to identify which resource is actually the bottleneck.

Practising full throughput-accounting questions and marking them against the official ACCA scheme with The 50% Club shows you exactly where your ratios or prioritisation lose marks — the fastest way to make this a reliable PM scorer.