The theory of constraints (TOC) defines throughput margin as ________.
A) operating income minus the direct material costs of the goods sold
B) operating income minus the direct labor costs of the goods sold
C) revenues minus the direct material costs of the goods sold
D) revenues minus the full costs of the goods sold

Question

Quizplus · Accepted Answer

Throughput margin is defined as the difference between revenues and the direct material costs of the goods sold. It is a key metric in the theory of constraints and measures the amount of money generated by a production process after accounting for the cost of the raw materials used to make the product.

The Theory of Constraints (TOC) Defines Throughput Margin as ________