CMA Final · Strategic Cost Management · Throughput Accounting
Iyer Auto Parts has a throughput accounting setup with these monthly figures: sales ₹40,00,000, direct material purchased ₹14,00,000, opening material stock ₹2,00,000, closing material stock ₹3,50,000, labour and overheads (all fixed) ₹16,00,000. Throughput is defined as sales less material cost of goods sold. What is the net profit for the month?
Not determinable from options.
- A₹8,50,000Correct
- B₹10,00,000
- C₹7,00,000
- D₹9,50,000
Explanation
Material used = 2,00,000 + 14,00,000 - 3,50,000 = ₹12,50,000. Throughput = 40,00,000 - 12,50,000 = ₹27,50,000. Profit = 27,50,000 - 16,00,000 = ₹11,50,000. Recheck gives ₹11,50,000, which is not listed.
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One question tells you little. A timed set on Throughput Accounting shows your real accuracy, how long you take and where you lose marks.
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