"Throughput" is the selling price of the amount processed through the binding constraint, minus the "full absorption cost" of producing this output.

Question

Quizplus · Accepted Answer

Throughput is defined as the selling price minus the direct materials cost of the amount processed through the binding constraint. Full absorption cost includes all manufacturing costs, such as direct materials, direct labor, and fixed and variable manufacturing overhead.

"Throughput" Is the Selling Price of the Amount Processed Through