# value is not created until products are sold # there is no such P&L account as "revenues from production" (i.e. revenues from goods made and stored as inventory) # costs of the not sold production (represented by material costs) are treated as variable and depress the throughput, as well as the throughput accounting ratio. # managers are encouraged to use the bottleneck resource to manufacture products for which there is demand, as in a JIT environment # organizations should adhere to production schedules and it is important to get things right from the first time # total factory costs, overheads shoud be allocated per products based on the usage of each product of the bottleneck resource. # management and accounting staff should get back to an understanding of what is happening on the shop floor and adapt performance measurements accordingly.
Cost accounting is a wonderful tool for the management to measure how the company resources has been utilized. It is very useful for the end users also.
Advantage = its fair Disadvantage = some people don't like fair things
One of the advantages of having a uniform accounting standard is knowing that you are comparing apples to apples if you were comparing two companies results. For example, if you were comparing a US company that used US GAAP and a company in India which used different accounting standards, you could not be sure that any comparisons would be based on the same methodology. With a uniform accounting standard, all companies would be required to value/measure and report their results the same way, therefore you could do a better comparison between the two companies.
Disadvantages; 1. You must learn the software. 2. The software will have bugs, so sometimes it will not work properly. The advantages far out-weigh the disadvantages.
Throughput: The rate at which an amount of work or data can be processed. It is a measure of comparative effectiveness of a process or an operation. Output: Quantity produced, created, or completed. It is a measure of productive capacity of a machine, factory, industry, company, or an individual.
The disadvantages of throughput accounting is that it is very costly. The system might require the retraining of the staff which is a costly exercise.
The disadvantages of throughput accounting is that it is very costly. The system might require the retraining of the staff which is a costly exercise.
advantages of branch accounting
advantages of price level accounting
what are advantages and disadvantages of harmonisation of accounting standards
cost accounting advantage & disadvantage
strength of historical cost accounting
advantages of conceptual framework in accounting
what are the advantages of accounting information disclosure?
responsibility
throughput time
advantage modified accrual accounting in government