Contribution Margin or Throughput Accounting

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May 23, 2018 at 6:32 pm #453635
opeyemiogunjimi
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Hi Sir,

If I am asked to choose which product to produce first, in order to maximise profit, and there is one limiting factor. Which method calculation should I use to rank the products to produce first? When do I use Contribution and/or Throughput Accounting?
May 23, 2018 at 9:46 pm #453664
John Moffat
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If the examiner wants you to use throughput accounting, then the question will say so.
Otherwise we use contributions (key factor analysis).
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