Why Throughput accounting is not Throughput costing?

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Throughput accounting is a well know management and accounting technique in cost accounting. And has gained much popularity because it has integrated the reasons to increase profits with the reasons that curtail business organizations from maximizing profits.

While defining Throughput accounting and even in its calculations, one can observe that this philosophy do not provide any help how costs should be accumulated, classified, allocated, apportioned etc. It is just providing the way cost data can be analyzed keeping the constraints and bottlenecks in consideration.

As this theory is not doing costing and is merely discussing how they should be treated that’s the reason it is called as Throughput Accounting instead of Throughput Costing.

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Teaching professional business subjects to the students of FIA, ACCA, CIMA, CA etc. He also found ACCA LIVE which is Pakistan's first portal to provide online classes and distance learning solutions to FIA/ACCA students. At PakAccountants.com he is busy making study material for different qualifications. Beside writing articles he answers questions asked using ASK TUTOR!

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