CIMA P2 Syllabus A. Managing The Costs Of Creating Value - Improving a TPAR - Notes ^{5 / 10}

Management should focus attention upon improving the throughput accounting ratio. If they can do this then higher levels of profit will be achieved.

Options to improve the TPAR include: -

1. Increase the selling price

2. Reduce material costs per unit

3. Reduce total operating expenses – this will reduce the total factory costs

4. Improve productivity so throughput will increase.