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Could you please explain why in question 76 BPP Revision kit, one of the correct answer about statements of throughput accounting is:
“TA assumes that material costs can be controlled in the short term”.
This means that TA considers material costs as the only truly variable costs in the short run, while all other costs are assumed to be fixed.
The rationale behind this assumption is that managers have more influence over the efficiency with which resources are used, including materials, in the short term.
They can make decisions to optimise material usage, such as using cheaper materials of similar quality or switching to suppliers offering the same material at a discount.
However, it is important to note that this assumption is specific to TA.
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