Throughput costing assumes that product costs other than materials tend to be fixed in the short run.

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Throughput costing is a method of costing that focuses on the extent to which the production process adds value to the product. It assumes that in the short run, fixed costs - which include expenses such as rent, salaries, and insurance - remain relatively constant, regardless of changes in the level of production. This means that changes in throughput (i.e. the number of units produced) will have a greater impact on the variable costs of production (such as direct materials and direct labor), and therefore on the overall cost of producing the product.

Throughput Costing Assumes That Product Costs Other Than Materials Tend