ACCA Performance Management (F5) Certification Practice Exam

Which of the following is a method to improve throughput accounting performance?

1. Increase sales price per unit

2. Enhance customer service quality

3. Expand the product line

4. Decrease marketing expenses

The correct answer is: Increase sales price per unit

Increasing the sales price per unit directly impacts throughput accounting by enhancing the contribution margin per unit sold. Throughput accounting focuses primarily on maximizing the flow of money through the business by identifying constraints and measuring performance based on throughput – that is, the amount of money generated from sales after deducting only variable costs. When the sales price per unit is increased, revenue from each unit sold increases while variable costs remain unchanged, leading to a higher throughput. This means that for the same level of production and sales volume, the business generates more income, thereby effectively improving its performance in the context of throughput accounting. While enhancing customer service quality could improve customer satisfaction and potentially lead to higher sales, the immediate financial impact on throughput is less direct compared to simply raising prices. Similarly, expanding the product line might offer opportunities for new revenue but may also introduce complexities and costs that could dilute focus on higher throughput. Decreasing marketing expenses could reduce costs, but it does not directly enhance the throughput measure. Thus, increasing the sales price is a straightforward method for improving throughput accounting performance as it ensures more revenue is retained per unit sold, effectively enhancing overall profitability.