Which focuses on increasing the excess of differential revenue over differential costs when the firm faces bottlenecks?
A)Differential income analysis
B)Throughput analysis
C)Theory of bottlenecks
D)Theory of constraints

Question

Quizplus · Accepted Answer

The concept of bottlenecks and the need to increase the excess of differential revenue over differential costs to break through bottlenecks is the core idea of the Theory of Constraints (TOC). Throughput analysis is a key tool used within TOC to identify and alleviate bottlenecks. Option A, differential income analysis, is a more general concept that does not specifically address bottlenecks. Option C, the theory of bottlenecks, is not a well-known or established concept, and is not a commonly used term in management accounting or operations management.

Which Focuses on Increasing the Excess of Differential Revenue Over