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A question on throughput indicated that discounts on the selling price is very common. In calculating the throughput/unit why is the discount also deducted from the selling price as well, after all we only consider material costs only.
This was in a Kaplan Revision Kit
The throughput return is the selling price less the material costs.
If there is a discount given, then the selling price is lower.
Gnom71: Again – please do not answer in this forum. (And this time your answer makes no sense – this is throughput accounting and CVP has nothing at all to do with it 🙂 )
Got the message:)
I meant that throughput is very common with marginal contribution ( which is used for CVP analysis)
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