Throughput Accounting

IMA Advanced Management Accounting,CIMA考试管理级等级中高级管理会计，同时也适用于自己对于管理会计内容的自学

Throughput Accounting

• throughput accounting
  • Throughput accounting is an alternative management accounting approach，with the focus being on improving profitability through maximising the use of a scarce resource.
  • The first step in throughput accounting is always to identify the scarce resource, otherwise know as the ‘bottleneck’.
• The theory of constraints (TOC)
  • The theory of constraints is a concept that states you can only produce products as fast as your slowest department will allow.
  • The slowest department or part of a process, often referred to as the ‘bottleneck’ is understood to set the pace of the entire operation. Therefore the way to improve efficiency is to remove the bottleneck, after which a new ‘slowest department’ will emerge that will become the new focus.
    • leads to a culture of continuous improvement (continuously working to improve the next bottleneck until resolved)
• Throughput accounting theory
  • Bottlenecks are an essential concept in throughput accounting and managers will always aim to remove them. However, this is not always immediately possible, therefore throughput accounting (TA) also aims to maximise profit by focusing on maximising the efficiency of the bottleneck in the process.并不总是可以直接消除瓶颈，有时候要通过提高瓶颈的效率来提高效率
  • 在throughput accounting中，短期的目标是来提高瓶颈的产能，长期的目标是来消除瓶颈
  • Throughput accounting costs
    • The costs in throughput accounting differ from marginal costing (which considers labour, materials and variable overheads to be variable costs) in that it considers material costs to be the only variable cost. All other costs, including direct labour, are treated as fixed.
    • Throughput contribution = Sales revenue - material cost
  • The focus is on making sales and removing bottlenecks
    • The primary focus with throughput accounting is how fast a business can generate throughput.A key indicator is the return per time period
    • absorption costing, that producing an excess of stock can increase profits as the overheads are absorbed into the stock. In throughput accounting, producing this stock does not have the same affect on profit margins从上面的公式可以看出throughput accounting考虑的是sales revenue并不包括库存.
    • focus
      • throughput first，最重要
      • inventory minimisation其次
      • cost control最次
    • 与传统方法的对比
      • Under a traditional approach, we would aim to work out which product will maximise contribution.
      • The idea under this approach is to maximise throughput.
  • When to use throughput accounting
    • Throughput accounting is useful where the focus is short term. This is because the reality of modern manufacturing is that direct labour and other overheads are in fact fixed in the short term.
    • throughput accounting is best suited to a management team where overheads and labour will be paid at the end of the day or week irrespective of how many units are produced.
    • The most suitable approach will depend on the situation and the time horizon of management’s goals.
  • Throughput accounting ratio
    • 上面的cost per factory hour并不是原材料的成本，因为原材料的成本在计算分子return的时候已经计算了，此处是指企业的其他成本
    • A TA ratio measures the return from the product against the cost of running the factory.
    • The aim of any profit maximising business will be to attain as high a TA ratio as possible.Anything above 1 in theory should be worthwhile as it generates more value per hour than it costs.cost control is not the primary focus of TA
    • 如何提高TA ratio
      • Increasing the throughput contribution
      • Increasing the return per factory hour
      • Reducing the cost per factory hour