Thursday, February 11, 2010

What is Throughput Costing

Throughput costing (super-variable costing) is a wildly different form of accounting variable costing where only direct material costs are considered inventory cost in an accounting system.

All of the other costs are costs of the accounting period in which they are actually incurred by the company. In particular, variable direct manufacturing labor costs and variable manufacturing overhead costs are regarded as accounting period costs and are deducted immediately as expenses of the period instead of by using throughput costing.

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