Throughput costing is a modified form of
A) Variable costing
B) Full costing
C) Absorption costing
D) Job costing

Question

Quizplus · Accepted Answer

Throughput costing is a modified form of variable costing. Unlike traditional full costing where all manufacturing costs are included in the inventory cost, throughput costing only includes direct materials and direct labor in the inventory cost. This simplification allows managers to focus on increasing throughput (i.e. the rate at which products are produced and sold), as opposed to reducing costs.

Throughput Costing Is a Modified Form of