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Throughput Costing. Prepared by Diane Tanner University of North Florida. What is Throughput Costing?. 2. An method of determining which costs are assigned as ‘ product’ costs An alternative to variable and absorption costing Also known as super-variable costing
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Throughput Costing Prepared by Diane Tanner University of North Florida
What is Throughput Costing? 2 • An method of determining which costs are assigned as ‘product’ costs • An alternative to variable and absorption costing • Also known as super-variable costing • Only direct materials are assigned to products • Direct labor and all manufacturing overhead costs are expensed when incurred
Rationale • Some managers take the view that only direct materials are truly variable and are the only costs that should be inventoried
Combinations • Can be combined with • Actual costing • Normal costing • Standard costing
