ACCA PM December 2026: Throughput Accounting — Why Your TPAR Is Wrong (and When Not to Use It)

In ACCA PM, throughput is sales minus direct materials. Nothing else. Labour goes into factory costs, every rate is measured per hour of the bottleneck, and you only use throughput accounting when the question tells you to.

Get those three things right and a TPAR question in Section B is close to free marks. Get one wrong and every figure that follows is wrong too.

What the examiner actually said

Throughput accounting appears in the Section B topic lists in the PM examiner reports year after year, so expect it in the December 2026 objective test cases. The clearest warning is in the March 2019 report. In a Section C limiting factor question, candidates "used throughput per unit instead of contribution per limiting factor". The examiner's instruction was plain: use throughput accounting only if you are told to. The requirement asked for maximum contribution, so contribution was the method.

Some credit was given because the two methods are close. But close does not pass. The examiner also noted that the most common problem with limiting factors was candidates "simply not knowing the method". The fix is the same in both cases: rank by the return per unit of the scarce resource, never by profit per unit.

The three numbers you need

Return per factory hour = (sales price − direct material cost) ÷ hours per unit on the bottleneck.

Cost per factory hour = total factory costs (labour + overheads) ÷ total hours available on the bottleneck.

TPAR = return per factory hour ÷ cost per factory hour. Above 1, the product earns more than it costs to keep the factory running. Below 1, every hour it uses on the bottleneck loses money.

The idea behind it is Goldratt's theory of constraints. The bottleneck sets the output of the whole factory, so an hour lost there is an hour lost for everything. That is why every rate is measured per bottleneck hour, not per labour hour or per unit.

Worked example: wrong vs right

Product K sells for $50. Direct materials are $20 and direct labour is $10 a unit. Each unit takes 0.5 hours on Machine M, which is the bottleneck, and 2 hours in assembly, which has spare capacity. Total factory costs (labour and overheads) are $600,000. Machine M has 40,000 hours available. The factory has 160,000 hours in total.

Wrong answer: Throughput = $50 − $20 − $10 = $20. Return per factory hour = $20 ÷ 2.5 total hours = $8. Cost per factory hour = $600,000 ÷ 160,000 = $3.75. TPAR = 2.13.

That answer has three errors. Labour has been deducted from throughput. Total hours have been used instead of bottleneck hours, once for the product and again for the factory. The ratio may still be above 1, but every answer option in the OT case will be built around the correct figure, so you will pick the wrong one.

Correct answer: Throughput = $50 − $20 = $30. Return per factory hour = $30 ÷ 0.5 = $60. Cost per factory hour = $600,000 ÷ 40,000 = $15. TPAR = 4.0.

Where the written marks are

The Section B case questions often end with "how could the TPAR be improved?" Generic answers like "cut costs" or "be more efficient" score little. Tie every point to one of the three numbers:

Raise the price or cut material cost to increase throughput per unit. Cut the time per unit on the bottleneck to increase the return per hour. Cut total factory costs, or add bottleneck capacity without a matching rise in cost, to reduce the cost per hour. Then say what it costs the business: a higher price may lose customers, and cheaper materials may hurt quality.

What to do this week

1. Read the requirement first. If it says "contribution", rank by contribution per unit of the limiting factor. If it says "throughput" or "TPAR", deduct materials only. Do not switch methods because you prefer one.

2. Circle the bottleneck before you calculate anything. Write "bottleneck = Machine M, 40,000 hrs" at the top of your workings. Both the product hours and the factory hours come from that resource and no other.

3. Learn one improvement for each part of the formula. Price, materials, bottleneck time, factory cost. Four ideas, each with one drawback, covers most "improve the TPAR" requirements.

The numbers

The PM pass rate was 42% in September 2026, below the 45% high in March. More than half of candidates are dropping marks somewhere, and Section B objective test cases on topics like throughput accounting are worth 30% of the paper. These are some of the most predictable marks you can get.

Materials out, bottleneck hours in, and only when they ask for it. That's throughput accounting.