Throughput and contribution

Throughput accounting is used when the question specifically states to use it, particularly when time is the limiting factor or bottleneck.

In contrast, contribution analysis is typically used in key factor analysis unless the question indicates otherwise. If the limiting factor is something other than time, or if the question does not specify throughput accounting, then contribution should be used.

Essentially, throughput is relevant when the focus is on maximising profit based on the selling price less direct material costs, while contribution considers all variable costs.

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