Hope you had a nice xmas. Please can you help on the below. Might be a silly question- but just wanted to make sure….
Which of the following features distinguish throughput accounting from other costing systems?
Tick all that apply.
? Work in progress is valued at labour cost only. No ? It does not attempt to maximise profit. No ? Work in progress is valued at material cost only. yes ? Costs are allocated to products when they are completed or sold. no ? Only labour cost is treated as a variable cost. no
no sure why ” It does not attempt to maximise profit.” is no.. since throughput accounting aims to maximize contribution. so does that basically mean it does not attempt to maximize profit but instead simply contribution?