Online Test Password
27-03-2012
28120744
28-06-2012
28-06-2012
| 14060833 |
Tuesday 27 March 2012
Tuesday 20 March 2012
Monday 19 March 2012
Wednesday 14 March 2012
Open Tuition ACCA
Open Tuition
ACCA Notes
F-2 Management Accounting
F-5 Performance Management
P-5 Advance Performance Management
F-7 Financial Reporting
P-2 Corporate Reporting
F-9 Financial Management
P-4 Advance Financial Management
P-3 Business Analysis
F-8 Audit and Assurance
P-7 Advance Audit and Assurance
F-6 Taxation (UK)
P-6 Advance Taxation (Not Available now)
F-4 Corpotate and Business Law (English)
F-4 Corporate and Business Law (Global)
P-1 Governance, Risk and Ethics
F-1 Accountant in Business
F-3 Financial Accounting
Financial Management Past Papers
Strategic Financial Management
Past Papers (ICMAP)
Past Papers (ICMAP)
November 16, 2009
Tuesday 6 March 2012
Throughput Accounting
TA was proposed as an alternative to traditional cost accounting.
As such, Throughput Accounting is neither cost accounting nor costing because it is cash focused and does not allocate all costs (variable and fixed expenses, including overheads).
Throughput Accounting is used as the performance measure in the Theory of Constraints (TOC).It is the business intelligence used for maximizing profits, however, unlike cost accounting that primarily focuses on 'cutting costs' and reducing expenses to make a profit, Throughput Accounting primarily focuses on generating more throughput.
Conceptually, Throughput Accounting seeks to increase the speed or rate at which throughput (see definition of T below) is generated by products and services with respect to an organization's constraint, whether the constraint is internal or external to the organization. Throughput Accounting is the only management accounting methodology that considers constraints as factors limiting the performance of organizations.
Management accounting is an organization's internal set of techniques and methods used to maximize shareholder wealth. Throughput Accounting is thus part of the management accountants' toolkit, ensuring efficiency where it matters as well as the overall effectiveness of the organization. It is an internal reporting tool. Outside or external parties to a business depend on accounting reports prepared by financial (public) accountants who apply Generally Accepted Accounting Principles(GAAP) issued by the Financial Accounting Standards Board (FASB) and enforced by the U.S. Securities and Exchange Commission (SEC) and other local and international regulatory agencies and bodies such as International Financial Reporting Standards (IFRS).
Throughput Accounting improves profit performance with better management decisions by using measurements that more closely reflect the effect of decisions on three critical monetary variables (throughput, investment (AKA inventory), and operating expense — defined below).
Read
It is not based on Standard Costing or Activity Based Costing (ABC). Throughput Accounting is not costing and it does not allocate costs to products and services. It can be viewed as business intelligence for profit maximization. Conceptually throughput accounting seeks to increase the velocity at which products move through an organization by eliminating bottlenecks within the organization.
three critical monetary variables (throughput, inventory, and operating expense
Throughput accounting uses three measures of income and expense:
http://www.managementaccountant.in/2006/12/throughput-accounting.html
As such, Throughput Accounting is neither cost accounting nor costing because it is cash focused and does not allocate all costs (variable and fixed expenses, including overheads).
Considering the laws of variation, only costs that vary totally with units of output e.g. raw materials, are allocated to products and services which are deducted from sales to determine Throughput.
Throughput Accounting is used as the performance measure in the Theory of Constraints (TOC).It is the business intelligence used for maximizing profits, however, unlike cost accounting that primarily focuses on 'cutting costs' and reducing expenses to make a profit, Throughput Accounting primarily focuses on generating more throughput.
Conceptually, Throughput Accounting seeks to increase the speed or rate at which throughput (see definition of T below) is generated by products and services with respect to an organization's constraint, whether the constraint is internal or external to the organization. Throughput Accounting is the only management accounting methodology that considers constraints as factors limiting the performance of organizations.
Management accounting is an organization's internal set of techniques and methods used to maximize shareholder wealth. Throughput Accounting is thus part of the management accountants' toolkit, ensuring efficiency where it matters as well as the overall effectiveness of the organization. It is an internal reporting tool. Outside or external parties to a business depend on accounting reports prepared by financial (public) accountants who apply Generally Accepted Accounting Principles(GAAP) issued by the Financial Accounting Standards Board (FASB) and enforced by the U.S. Securities and Exchange Commission (SEC) and other local and international regulatory agencies and bodies such as International Financial Reporting Standards (IFRS).
Throughput Accounting improves profit performance with better management decisions by using measurements that more closely reflect the effect of decisions on three critical monetary variables (throughput, investment (AKA inventory), and operating expense — defined below).
Read
It is not based on Standard Costing or Activity Based Costing (ABC). Throughput Accounting is not costing and it does not allocate costs to products and services. It can be viewed as business intelligence for profit maximization. Conceptually throughput accounting seeks to increase the velocity at which products move through an organization by eliminating bottlenecks within the organization.
three critical monetary variables (throughput, inventory, and operating expense
Throughput accounting uses three measures of income and expense:
- Throughput (T) is the rate at which the system produces "goal units." When the goal units are money (in for-profit businesses), throughput is sales revenues less the cost of the raw materials (T = S - RM). Note that T only exists when there is a sale of the product or service. Producing materials that sit in a warehouse does not count. ("Throughput" is sometimes referred to as "Throughput Contribution" and has similarities to the concept of "Contribution" in Marginal Costing which is sales revenues less "variable" costs - "variable" being defined according to the Marginal Costing philosophy.)
- Investment (I) is the money tied up in the system. This is money associated with inventory, machinery, buildings, and other assets and liabilities. In earlier TOC documentation, the "I" was interchanged between "Inventory" and "Investment." The preferred term is now only "investment." Note that TOC recommends inventory be valued strictly on totally variable cost associated with creating the inventory, not with additional cost allocations from overhead.
- Operating expense (OE) is the money the system spends in generating "goal units." For physical products, OE is all expenses except the cost of the raw materials. OE includes maintenance, utilities, rent, taxes, payroll, etc.
Organizations that wish to increase their attainment of The Goal should therefore require managers to test proposed decisions against three questions. Will the proposed change:
- Increase Throughput? How?
- Reduce Investment (Inventory) (money that cannot be used)? How?
- Reduce Operating expense? How?
http://www.managementaccountant.in/2006/12/throughput-accounting.html
Subscribe to:
Posts (Atom)