Instead of maximizing income, as measured by traditional accounting methods, the theory of constraints seeks to maximize
A)contribution income.
B)throughput contribution.
C)quality.
D)segment margin.

Question

Quizplus · Accepted Answer

The theory of constraints seeks to maximize throughput contribution, which is the difference between the revenue generated by selling a product and the direct materials and labor costs of producing it. This approach focuses on increasing the production rate of bottleneck resources in order to increase throughput and ultimately generate more profit.

Instead of Maximizing Income, as Measured by Traditional Accounting Methods