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Thorughtput accouting is most suitable for which of the following
A) Short term decision making in a business
Which subcontract all its manufacturing activity
B) short term decision making in a highly automated manufacturing environment
We know that throughput is suitable for short term and answer is B
My question is why not A just because of subcontracting nature ?
Yes. Throughput accounting is so as to make the best use of machine time available, but if they are subcontracting the manufacturing then they will not be using any machine time.